The Working Capital Journal is one of several commercial financing resources which should be reviewed regularly by small business owners to assist in keeping up with the imposing difficulties posed by rapid changes in the business finance funding climate. As noted below, there have been some surprising actions taken by lenders as a direct result of recent financial uncertainties. The increasingly complex and confusing environment for working capital finance is likely to produce several unexpected challenges for commercial borrowers.

The working capital finance industry has primarily been operating on a regional and local basis for many years. In response to cost-cutting that has permeated many industries, there has been a consolidation that has resulted in fewer effective commercial lenders throughout the United States. Most business owners have been understandably confused about what this might mean for the future of their commercial financing efforts, especially because this has happened in a relatively short period of time.

Of course, for some time there have been ongoing complex problems for commercial borrowers to avoid when seeking commercial loans. But what has produced a new set of business finance funding problems is that we appear to be entering a period which will be characterized by even more uncertainties in the economy. Previous rules and standards for commercial financing and working capital finance are likely to increasingly change quickly, with little advance notice by business lenders.

Business owners should make an extended effort to understand what is happening and what to do about it due to this realization that substantial changes are likely throughout the United States in the near future for commercial finance funding. At the forefront of these efforts should be a review of what actions commercial lenders have already taken in recent months. The Working Capital Journal is one prominent example of a free public resource that will facilitate a better understanding of the responses by business lenders to recent economic circumstances.

By publicizing actions taken by commercial lenders, this will contribute to these two goals, both of which are likely to be helpful to typical business owners: (1) To highlight controversial bank-lender tactics with a view toward reducing or eliminating questionable lending practices. (2) To help business owners prepare for commercial finance funding changes. To assist in this effort, sources such as The Working Capital Journal are encouraging business owners to report and describe their own experiences so that they can be shared with a broader audience that might benefit from the information. Some of the most significant commercial financing changes reported so far by commercial borrowers involve working capital loans, commercial construction financing and credit card financing. A notable situation of concern is that predatory lending practices by credit card issuers have been reported by many business owners. Some specific businesses such as restaurants are having an especially difficult time in surviving recently because they have been excluded from obtaining any new business financing by many banks.

One of the few recent bright spots in business finance funding, as noted in The Working Capital Journal, has been the continuing ability of business owners to obtain working capital quickly by business cash advance programs. For most businesses accepting credit cards, this commercial financing approach should be actively considered. Business cash advances are literally saving the day for many small business owners because most banks appear to be doing a terrible job of providing commercial loans and other working capital finance help in the midst of recent financial and economic uncertainties. For example, as noted above, restaurants are virtually unable to currently obtain commercial finance funding from most banks. Fortunately, restaurants accepting credit cards are in a good position to obtain needed cash from credit card receivables financing and merchant cash advances.

Are you trying to get a new loan or attempting to refinance an Getting approval.

existing one and are finding it very difficult due to your poor credit score getting approval? You can take heart in the fact that there are lenders out there that can accommodate you. You just have to know where to find them getting approval. The internet is a great place to start as you can search a large number of lenders very quickly and narrow them down to the ones that offer the best rates. getting approval in this article I will share a few tips to help you .

The better your credit score Getting Approval For Bad Credit Financing.

the better your rates. So if you don’t have great credit, look for someone who does getting approval. By having them co-sign for your loan, you can find yourself qualifying for much better rates. getting approval lenders look at your co-signers record, but you pay for the loan.

In the case of married couples, the partner with the highest credit score can apply for the loan. getting approval which partner this is can be found easily online.

Update Your Credit Report

It is a good idea to check your credit report regularly to getting approval ensure that all the information is current. Also consider writing a letter giving an explanation for your poor credit score. Lenders will account for mitigating circumstances such as illness getting approval or loss of job.

Rid Yourself of Old Debt and Hang on to Cash Assets

Lenders take other factors into account when look at a loan application. getting approval these factors include the amount of existing debt you may be carrying and the amount of cash assets you have. getting approval low debt looks better, especially if you are a high earner.

Lenders look for what cash assets you may have when considering you for a loan. This may be in the form of savings or money market. You should aim to have a least six months of cash reserves.

Do Not Lie on Your Application Getting Approval

More than likely, you will be approved for refinancing. getting approval what rates you qualify for depends on your information. So to get the most accurate loan estimate, be honest about your credit background. That way, when you actually apply for the loan, you will be approved for the rate quoted.

Lenders don’t all charge the same rate. getting approval with the right care and attention you can find a company that will give you a good rate, even with a Getting approval bad credit history.

Getting Approval For Bad Credit Financing

Your business has just broken through by getting a big order for your new, improved anti-gravity unit. This is going to take you to a whole new level. Yay!

You don’t have the money to finance your life-changing new order. Boo!

Purchase order (PO) finance is a game-changer when you have an order and a supplier, but when you still need the money to pay for the order. This is a common business problem for entrepreneurs. When success knocks, a business owner with great customer relationships needs to make certain his finance capabilities match his growing order flow.

Here’s how PO finance works: you get an order from a creditworthy customer. The funding company checks the customer’s credit and satisfies themselves that the customer is stable. Then they will arrange payment to the supplier with your customer order as security. Orders to suppliers outside the country will generally be paid for with a letter of credit; inside the country, there may be other arrangements made to secure payment for the goods.

Many business owners worry about their credit when they seek finance. The key in PO finance is the strength of your end buyer; THAT is the primary determinant in getting the deal done. Your own business financial picture is taken into account, of course, but your experience and the customer’s credit profile are of much higher relative importance.

If you have good profit margins, you may need very little of your own cash to do the deal. It is possible that almost all of the supplier’s cost will be covered by the finance group. Normally, some of your cash will be required, as finance people are much more comfortable when you have capital at risk also.

When goods have been delivered to the customer, you can invoice your customer for the goods. This allows you to convert purchase order finance into invoice finance. PO finance is perceived as a riskier form of financing because more things can go wrong. As a result, you pay more until the PO converts to invoice financing. As a result, it is always in your interest as the business operator to complete the PO portion of the finance quickly.

A key point in the use of PO finance and other finance tools is to assess the cost of funds versus the profit margin to be obtained. Entrepreneurs sometimes think that certain types of funding are too expensive. This is only true if margins are narrow. Finance costs must always be assessed relative to the profit to be obtained. There are a number of reasons why more expensive funding is useful: to maintain customer relations by satisfying certain orders; and of course, to capture a profit that would be lost without the finance.

The private finance companies who provide PO financing differ from banks in one other important way. Whereas a bank will generally approve a credit line and leave that amount in place for quite some time, private PO funders have a different view. They seek execution partners who want to grow their businesses. Once you, the business owner, have shown your ability to manage increased order flow effectively, you become the perfect candidate for an expanding credit line in the funder’s eyes. Relationships count in the finance world, especially to companies who are looking for the right entrepreneur to back.

Know your options for car financing before actually applying for a car loan. There are a number of places from where you can get car loans.

You can get financing from local banks and credit union. When you approach the banks and the credit unions, you should have all the necessary documentation such as residence proof, income proof and your credit score ready. Even those with bad credit scores or those that have bankruptcy in the past year can get financing for a car. Those with bad credit scores may be asked to pay a higher rate of interest and may have to limit their options for purchasing cars.

Applying Online for Car Financing:

A number of online loan companies can also disburse loans. When you apply for an online car loan application, you would be matched by with a number of lenders. Lenders will compete within themselves to offer you the best interest rates for your options. Many of the online lenders specialize in offering bad credit loans to those that have less than perfect scores. Shop around for rates before actually settling on a particular lender for car financing.

If you have bad credit, then you would be charged a higher rate of interest for your car financing. The interest rates range between 10-20%. Some of the lenders may also require a larger down payment (20-50% of the loan amount).

Home Equity Car Financing:

Use this route for car financing only if you have build some equity in your own house else don’t even think about it. You can use a home equity loan to cover your car financing. With a home equity loan, you won’t be in danger of losing your home. In fact home equity loans can be used for a number of things.

Getting Financing From Your Family:

You can also get financing done from your family. You family can loan you the loan or even co-sign a car loan. But ensure that all possibilities are suitably chalked out for car financing before any future problems may arise.

Financing from Dealers and Manufacturers is Usually More Expensive than from Financial Institutions:

Usually car loans from a dealer or manufacturer will work out to be more expensive than normal car financing options. Since the dealers get their commission from banks and other financial institutions, you will pay a higher rate of interest.

When you go for financing, first negotiate the price of the car as though you are paying cash. Then you should tell the dealer that you have lined your financing options then ask the dealer if he can beat the interest rate and the loan term.

If you have bad credit scores, you can still apply for financing. Remember that the interest rates for new cars are less than that on used cars. Financing for new cars can be also be done for longer-term periods than on used cars. In many cases new cars are less expensive than for older cars.

In our series of finance recruitment articles, we will be looking at various finance job roles. The first in the series is the role of a Finance Controller.

Finance Controllers work directly with Finance Directors to manage the day to day finance matters of a company. This senior role is seen as the stepping stone to becoming a Finance Director and involves tasks such as creating finance strategies, working with cash flow, creating accounts, creating and checking financial targets, working with management, monitoring departments and many others.

Finance Controllers use their knowledge to help make decisions when their company is looking at potential acquisitions and will be part of most major finance and business decisions.

Candidates for Finance Controller jobs will be expected to have a background in accountancy and once in the role will be in charge of managing teams of Ledger Clerks who will deal with the more administrative and accountancy aspects of the department.

The day to day aspects will see you working traditional hours, although you will be expected to put in extra hours where necessary. Like many high responsibility management roles, much of your time will be spent within meetings and travelling between offices to provide your services.

When businesses or finance recruiters are looking for candidates for Finance Controller positions, they will be looking for someone who is good at presenting finance data as they will be spending a lot of time doing this to various people in meetings. Other skills that will be looked for are motivation, ability to multitask, attention to detail, good decision making skills and obviously a good understanding of the financial world.

Previous experience in finance and management accounting will be expected for the role of a Finance Controller. You will also be expected to have a qualification from one of the accountancy bodies in the UK (ACCA, CIMA, CIPFA, ICAEW, ICAI, ICAS).

Finance Controllers often move on to become Finance Directors, and some even become Managing Directors or Chief Executive Officers, so there are some great career prospects that come with this role.

As with most jobs in the finance sector, salaries are at the higher end, trainees can earn up to £25,000 and qualified finance controllers can earn up to £45,000 a year. As your experience and time grows in the role, your salary can increase to between £50,000 and £100,000.

For more information on finance controller jobs you should talk to a professional finance recruitment company.

If you were to dissect the culture of a business, and you ask various people in an organization what the real roles of each department are, you’ll find the well-known dichotomy between “front office” and “back office” operations.

Front office staff are the people who deal with customers. They might be the customer service department, the sales department, and sometimes the marketing department (depending on how involved the marketing department is in the sales cycle). Back office staff are usually the admin assistants, HR, and the killjoy of all businesses – the Finance department.

In businesses I’ve observed, Finance departments often face silent derision or disrespect. Part of it is an us-versus-them mentality that comes out of the front office staff who feel their jobs are more difficult because they deal with customers (compared to Finance, who deal with numbers). And no one from the front office sends memos to the back office saying “please spend less time crunching the numbers” but it can feel like the back office is constantly memo-ing the front office with “watch this expenditure” or “spend less on client lunches”.

Unfortunately, this view is supported by management at all levels that give Finance the nasty job of accounts receivable, the inputting-heavy job of accounts payable, and the dull job of budget forecasting. Compared to the highly creative marketing department and the edge-of-the-seat, in-the-trenches feeling of the sales department, finance is like the broccoli side dish on a plate of steak and fries.

But it doesn’t have to be this way! Finance departments shouldn’t be relegated to the back office in the hopes that their sharp pencils won’t poke a customer in the eye! Finance departments can and should play a far more important role in the organization. Here are some ideas:

• POSSIBILITY 1: Finance should be more about business strategy than number prophecy. When the Finance department hounds the sales managers to get in their budgets and then turns them around for a final target budget for the year, their role is reduced to mere numerical interpreter. But what if Finance sat down with sales and talked to them about how their numbers connected to expected outcomes? And then, what if Finance sat down with the executives of the company and actually worked out a forecast that was tied to what the market was anticipating! Imagine a world where Finance’s numbers were more than just a spreadsheet that gets pulled out at every quarterly review.
• POSSIBILITY 2: Finance should be more about opportunity. Many sales managers have some limited view into which customers are sending business. But the view isn’t always perfect. Or complete. Finance should get involved to show how a customer is really impacting the business’ bottom line. If Finance and Sales talked to each other, Sales might be shocked to discover that their biggest client is actually less valuable than expected because of the amount of work involved in keeping them as clients, or they might discover that a seemingly profitable client isn’t profitable at all because their receivables get very, very old. Imagine a world where the Finance department can relate true business impacting information to Sales to tell them which opportunities are truly the most profitable.
• POSSIBILITY 3: Finance should be selling, too. When Finance gets the job of following up on accounts receivables, they can potentially do more harm than good. Finance people are highly skilled at numbers, and they might be good “people-oriented” staff, but they are rarely trained in the art of sales. However, when a Finance person, tasked with accounts receivables, gets adequate training in receivables AND customer service AND sales, their success rate at getting the receivables paid can increase, but so will their success rate at winning more business.

There are so many more opportunities, too. Businesses should be using their accounts payable list as a prospecting list. They should be temporarily swapping roles between Finance and Sales for brief “see-how-the-other-side-does-it” days to enable new appreciation and new connections. Finance should sit in on sales calls to see why Sales sometimes feels like they need to bend the rules to close the deal (and Sales should shadow the work of Finance so they know what work needs to happen at the back-end if they don’t assess risk adequately during the sale).The bottom line for businesses should not be derived from a cloistered Finance department. Instead, a business can uncover new and exciting opportunities when it makes its Finance department an integral part of the entire business.

Two types of alternative business financing that often get confused with one another are Accounts Receivable Financing and Purchase Order Financing. It’s understandable that they sometimes get confused, however, they are two very different types of alternative business financing that serve two very different purposes.

Accounts Receivable Financing is used when you have outstanding invoices on your aging report and want to access that cash now instead of waiting to be paid at a later date.  NOTE:  To qualify for Accounts Receivable Financing, your product or service must have been delivered and invoiced; otherwise there are no Accounts Receivable invoices to use as collateral.

The two types of Accounts Receivable Financing most commonly used are Asset Based Lending and Factoring:

• Asset Based Lending - You can get traditional bank financing or alternative business financing in the form of asset based lending.  If you qualify for bank financing, go that route first because the cost of capital will always be less than non-traditional asset based lending.  You receive a line of credit from a bank or non-bank lender and use your accounts receivable invoices as collateral for the line.  Each institution has different underwriting standards; however, the important thing to remember is that the strength of your company will still play a role in getting approved.  It will be not be possible to get bank financing if your business is losing money because banks are very conservative…and rightly so; they’re not making much money on your line compared to non-traditional lenders.  These non-traditional lenders will still have to qualify your company in the underwriting process (although less stringent) and have certain covenants tied to the line in order for it to stay open.
• Factoring – This is a form of financing where a 3^rd party purchases your accounts receivable invoices at a discount so you can receive working capital today instead of having to wait 30, 60 or 90 days to be paid.  Factoring is more flexible that asset based lending in the sense that you’re qualified based on the strength of your clients, not your financial strength.

Purchase Order Financing, also known as PO Financing, is used when capital is needed to fulfill an order after receiving a PO.  Smaller companies that start to receive larger orders can turn to this type of alternative financing to help sustain growth.  PO Financing only makes sense when profit margins are large enough to offset the cost of capital.  It can be costly; however, it’s still cheaper than equity.So remember, Purchase Order Financing is used on the front end of a transaction and Accounts Receivable Financing is used on the back-end of a transaction.  If your company needs financing for growth or survival, these two types of financing may be very helpful financing tools.

When it is time to arrange the financing for an acquisition, it is important to be creative. When seeking money to buy a company, you will notice that a number of community banks, typically big funders of certain acquisitions, are encountering difficulty due to their degraded residential (builders) loan portfolio. Creativity can make the difference between accessing capital or canceling the acquisition, especially now when credit markets are tighter.

Here are some options for financing acquisitions:

1. Owner financing / seller financing – Go to the seller first. Who is better prepared to finance the business than the person or company who owned it? They know the business better than anyone and are most familiar with its risks. In the current environment, you should be able to get 40-70% of the business financing via owner financing. You must convince the seller you are a good risk, just as you would have to convince a bank.

2. Supplier or vendor financing – The target company’s suppliers and vendors are a good source of financing. Their business is likely to increase under your new ownership. (i.e., If you do not intend to grow the business, why would you buy it?) Leverage that growth in their business to negotiate for financing from them. If the target company has been a good customer, the supplier is knowledgeable about the business and will understand the inherent risks better than a typical bank. Note that if you are an existing business acquiring another business, you can pursue financing from your suppliers and vendors. The same reasons apply.

3. Mezzanine financing or private equity funding – Mezzanine and private equity funds that serve the small and medium markets raised large sums of money before the market meltdown. They therefore have money to spend and are looking for great opportunities. With fewer people and companies making acquisitions right now even though multiples are very low, now is a great time to obtain mezzanine financing. The target company typically will need revenue of $10 – $20 million and higher and EBITDA of $2 – 3 million and more to be interesting to a mezzanine or private equity fund. Why? These funds have to spend large amounts in a relatively short period of time (5-7 years) so they need larger deals.

4. Bank debt – If the target company has a lot of medium to long-term assets in addition to good cash flow and a strong profit margin, you should have relatively few problems finding bank financing. However, if you want to buy a service company which has a lot of receivables and other short term assets, you may encounter difficulty. Find a bank that has a history of financing the type of company you are buying. Also, talk to the seller’s banker. If the seller has a strong banking relationship, the banker will know the business well, increasing the likelihood that that bank will provide financing in order to retain the relationship and the itinerant deposit accounts.

5. Receivables financing – If you find it difficult to obtain bank financing, pursue account receivables financing firms. They can provide term loans and lines of credits against the receivables. Although the interest rate will be higher, these firms are more familiar with receivables financing and thus often more comfortable with lending against receivables.

6. Pre-paid sales – Approach the target’s customers and ask them to make a bulk purchase or pre-pay for several months’ or a year’s worth of products or services in exchange for a strong discount.

These are some acquisition funding options to stimulate your own creative thinking and approach. There are other alternatives, some of which may be unique to your particular business.

Not all businesses have Finance Directors, and there is a common attitude that only large, enterprise level companies need them – and afford them. However, many growth businesses need help from a finance director before reaching enterprise level, understanding the role of a financial director can be the first step towards gaining the expertise of an individual that can literally make the difference between the success or failure of a business.

The primary functions of a financial director can be summed up in six points:

1. Finance Directors are responsible for managing the finance function of the business which would include overseeing such things as transaction recording, cash flow management, internal controls management and statutory reporting, finance department personnel management and development , external auditors and tax advisors.

2. The FD manages the financial and business planning of the business, including budgets, forecasts, strategic business reviews, financial strategy, cash and finance requirements and formal business plans that can be presented to third parties such as potential investors.

3. FDs manage relationships with important external interested parties including funders, bankers, outside investors, solicitors and corporate financiers as well as the aforementioned auditors and tax advisors

4. A finance director with a commercial business background is often able to contribute to and manage functions such as IT systems, legal, HR, property and other facilities. Special projects such as mergers and acquisitions and internal change management are also often handled by the finance director.

5. The FD will be the numbers interpreter and translator. A good Financial Director will not only produce good quality numbers using sound and robust systems and processes but will be able to describe what the numbers mean. Furthermore, this interpretation encompasses not only what has happened but what might happen in the future, using indicators and key metrics. The translation of numbers into facts on the ground is probably the main differentiator that a good Finance Director has over a good financial controller.

6. Finally, but crucially, the FD is perfectly placed to be the business number two to the MD, the ideal business partner, devil’s advocate, conscience, voice of sanity and where occasionally necessary, the brake. A good FD can talk finance to finance people as well as present finance issues affecting the day-to-day running of the business in a clear and concise way to the management team.

It might be logical to conclude that with all of these responsibilities, a Finance Director is a full time role required by bigger companies. However, more and more businesses are discovering that there is a crucial period in the life of a growing business where the skills and experience that can deliver the above services are required, but not on a full-time basis, and that a flexible Finance Director is a low risk, cost-effective bridge between using a bookkeeper/accountant combination and acquiring that first full-time FD.

What is a “flexible” Finance Director?

A flexible, or part-time FD does just about anything one would expect a permanent Finance Director to do, as long as it’s not illegal, unethical or immoral! Some clients have just a bookkeeper, others have a financial controller leading a finance team and the flexible finance director adapts to the resources of the client.

Generally, flexible Finance Directors work on an on-going basis with clients on projects of strategic value but are also happy to oversee the finance function in all its entirety.

Moreover, a flexible FD doesn’t go native as they are not working within the company full time. The main advantage this gives is the ability to retain an external perspective on issues. This can be very important when management teams in SMEs are often very overworked and do not have quality time to stand back from issues to see them in a fresh light.

Lastly, having a flexible FD model enables growing businesses to afford that critical expertise at a fraction of the cost of a full-time Finance Director.