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Exclusive Interview with ERPS Group CEO/Chief Financial Consultant, Ella Rivkin

Exclusive Interview with ERPS Group CEO/Chief Financial Consultant, Ella Rivkin

New York City based, full-service accounting firm, ERPS goal is to help individuals, professionals, and businesses maintain financial stability as they grow their assets and plan for the future. ERPS provides assistance in estate aligning, retirement and trust planning, wealth management, and money-saving services for individuals. For businesses, the company assists with taxes, payroll, insurance, HR, benefits, and more. Today, we have the pleasure of interviewing ERPS Co-Founder, CFO, and CEO, Ella Rivkin to get her insight on tax preparation and filing tips for small business owners.

Excel Capital Management: Hello, Ella. Thank you for taking the time to be interviewed by Excel! To get started, tell us a little about yourself, how you got into the accounting industry, and your company, ERPS.

Ella Rivkin: I came to this country at a young age, chasing a dream just like many before me. I found myself very proficient in helping others and while growing up, and I knew that finance was a field that would strongly interest me. I began looking for work in the financial field while in school in order to gain experience. Eventually, I found myself working in an accounting office where I began to learn the necessary skills I bear today. After many years, I was finally presented the opportunity to open up my very own office, E.R.P.S. Inc. where I could finally utilize all my years of experience to help others chasing their business goals.

 

ECM: How can small business owners use your services at ERPS for their business finances?

E.R.: What makes E.R.P.S. stand out from others is that we develop strong business relationships with small business owners in order to establish successful networks and a beneficial support system for the owners. We are there to address any concerns the owners might have regarding their day-to-day operations and it is with this help that we are able to attract new clients that add to our growing community.

ECM: It is important for business owners to have a strong working relationship with their accountant. What are topics business owners should constantly discuss with their accountant, and how often should meetings be set up?

E.R.: After many years, I have advised many owners on how to better their business and succeed. It is important to address key topics that many fail to see. Some of these topics include careful handling of all business expenses so as to keep everything organized and manageable. Another important topic is keeping track of all employees and payroll information so as to not have any confusion within the organization. A well-organized account of everything going in and out of the company, whether it be assets, credits, etc. is key to maintaining the necessary structure of any business which hopes to prosper.

ECM: As you know, Excel Capital Management provides alternative financing solutions to small to mid-sized businesses. For a business owner that is in the market for a business loan, what advice would you give them before applying?

E.R.: Prior to applying for a loan of any kind, it is important to insure that everything in your company is up to date, financially, and that the business is ready to accept the responsibilities of said loan. I have seen many companies accept loans as a means of growing their business, whether big or small. A loan provides much needed support for a business, especially one that is looking to expand. By accepting a loan, it is important to monitor and stay on top of all its financial aspects, primarily due to the fact that if one loan is handled correctly, it allows for that business to receive additional, larger loans in the future which in turn helps the business even more.

ECM: Many businesses Excel funds continue to apply for additional working capital over the business’ lifetime. Based on your expertise, what determines when business owners should reach out for working capital via an alternative lender such as Excel Capital Management?

E.R.: A company is only as successful if it keeps constantly looking for bigger and better things to make it stand out. Unfortunately, not every business owner is capable of financially providing the necessary funding for these ventures. There comes a point where the owner(s) exhausts every resource and their disposal and has no other place to turn to. In this situation, it is necessary to reevaluate the company and its potential success. If the company is in fact making progress towards its goals, then it is understandable to reach out to lenders and request additional funding. Reaching out to lenders like Excel makes it possible to continue expanding one’s business by attaining the much needed capital that allows for new equipment, new ideas, etc. necessary for corporate growth. There is a common saying, “You have to spend money to make money”—this couldn’t be more true!

ECM: Lastly, what is the most important accounting advice you would give to small business owners?

E.R.: It must be said that for any business to succeed in today’s day and age, it is necessary to have desire and determination as the driving factors. As an accountant, I must say that proper discipline and motivation is required when managing any business. There are always going to be obstacles along the way that make it seem impossible to overcome, but with proper leadership and organization, no obstacle will be too great. It is also important to maintain proper communication between the business owner and the accountant, because one cannot do their job without the other. Keeping your accountant up to date on all of your business ventures and operations is key, therefore the accountant must be provided with any and all necessary information about the business at all times.

For more on ERPS Group, visit: erpsgroup.com and be sure to “like” their official Facebook page: facebook.com/erpsinc.

3 Reasons Why Applications For Business Loan Get Declined

3 Reasons Why Business Loan Applications Get Declined By Traditional Lenders and Alternative Financing Solutions

Almost all business owners apply for some sort of financing to grow their company at one point or another. When it comes to applying for for this financing through a traditional bank or lender, the process can be a tough one, and many business owners walk away with a big fat decline. While this may be disheartening, there are many reasons why business loan applications get declined and lenders are so strict, and there are still other options out there. Let’s take a look at the three main reasons why business loan applications get declined by traditional banks and lenders, and then take a look at the great alternatives that are available!

Why Traditional Lenders Decline Business Loan Applications:

  • Low Cash Flow: If a traditional lender decides to give your business a loan, they will want to see the ability to make payments back on the loan amount in addition to covering all other business expenses. Unfortunately, tough times do occur where businesses don’t generate enough revenue at certain times of the year – maybe they are a seasonal business. Some business owners, such as contractors, aren’t paid until jobs are completed or they must pay inventory suppliers upfront before they get paid. Tight margins typically do not sit well with traditional lenders and you could get your business loan declined.
  • Poor Credit, Bad Credit, or No Credit: Like NorthShore Advisory Inc. Credit Expert Tracy Becker told us in our exclusive interview, “in today’s fast-paced business world, more partners, lenders, and potential accounts need to make quick decisions as to which suppliers, borrowers, and partners they want to work with; decision-makers use a variety of business credit scores, indexes, and reports to discard unqualified candidates from being considered for a partnership or a loan.” A business’ credit score is a major factor when a traditional lender considers approving them for financing. Poor credit, bad credit, or simply no credit can almost always guarantee a decline. To learn more about how businesses can improve their credit score, visit: http://www.northshoreadvisory.com/
  • No Collateral: Traditional banks and lenders almost always require some sort of collateral to secure a loan. Collateral can come in the form of a vehicle, personal or business property, equipment, and/or other assets. If a business owner defaults on the loan, this collateral will then be seized for nonpayment. Unfortunately, many business owners (especially young business owners or startups) do not have collateral to put up when it comes to acquiring a loan, or the lender may not deem anything the business owner has as anything of value.

Your Business Loan Application Got Declined By A Traditional Lender – What Are The Alternatives?

Despite the fact that traditional lenders can take weeks to process your loan application and also require a lot of paperwork, there are alternative financing solutions available if you got your business loan declined. Unlike big banks, alternative lenders typically only require you to submit a simple, one-page application, 4 months of recent bank statements, and 4 months of recent credit card processing statements in order to get an offer and approval in a matter of days! Let’s take a closer look at the alternative funding solutions available to your business so even if your business loan was declined your options are open!

Merchant Cash Advance: Short-term financing transactions that are collected through a set percentage of your visa and MasterCard sales that are accepted at your place of business. Probably the most common term used in the industry. These do not have a set repayment schedule and are based on the volume of your business’s credit card processing sales. These are usually only guaranteed by the future sales of your business.

ACH Advance: A form of a merchant cash advance that is repaid on a daily basis by direct ACH debits rather than a merchant account.   These are still a purchase of receivables and the amount debited via ach are determined by the amount of credit card processing sales that are batched out the previous day.

ACH Loan Products: These are a bit different than cash advances as they are considered loans and may have personal guarantees. They have a fixed repayment schedule that is paid either daily, weekly or monthly. These products are catered to industries that do not accept credit cards and need a fixed payment.

Accounts Receivables Financing: This is one of the oldest forms of funding in history. This is used mainly when a business is due some sort of capital for work complete and is billed on a net 30, 60 or 90. for example, ABC Trucking delivered goods for xyz logistics but only receives payment from xyz logistics in 60 days. ABC can then factor the money due from XYZ at discount to receive the capital due in 60 days today.

Invoice Factoring: The purchase of accounts receivable for immediate cash.

Equipment Financing: A type of loan or extension of credit to a business, with the purpose of helping the business acquire new equipment. Equipment Financing Extends only the capital needed to purchase a specific piece of equipment and is most commonly written as a lease.

Business Lines of Credit: A rotating loan that gives business owners access to a fixed amount of money, which they can use day-to-day according to their need for cash. Interest is only paid on the amount of the advance actually used.

Start-Up Funding/Loan: A type of loan that provides a new business/company with sufficient upfront capital to get off the ground.

Asset Based Loans: A business loan secured by collateral.

SBA LOANs 504 Loans: The US Small Business Administration 504 Loan or Certified Development Company program is designed to provide financing for the purchase of fixed assets, which usually means real estate, buildings and machinery, at below market rates.

Term Loans: A loan that is backed by a bank for an exact amount that has a specified repayment timetable and  interest rate that are adjusted accordingly. Terms mature between 1 and 10 years.

It’s pretty clear to see why an alternative lender may be the way to go when it comes to applying for financing for your business. No complicated application process, no lengthy paperwork and documents, and an approval in as little as 3 business days! For more information on alternative financing solutions and what Excel Capital Management can offer your business, visit: https://www.excelcapmanagement.com/loan-form/

Funding: Venture Capital vs. Working Capital

Funding: Venture Capital vs. Working Capital

Most business owners will apply for some sort of capital at least once over the business’ lifetime. This capital can be used for various reasons at various stages of the business life cycle: business start-up, expansion, equipment, purchases, hiring, etc.. When it comes to the growth of any business, money is essential.  What the capital is being used for determines just what type of capital it is – venture or working – and how one goes about acquiring it. No matter what though, as a business owner it is important to do your homework and know what type of funding you are applying for and how it can affect your bottom line in the long run. Let’s take a look at the difference between venture and working capital funding and the funding process for each.

VENTURE CAPITAL FUNDING

Venture Capital is normally sought after by up and coming business owners that are early in the life cycle of their endeavors  – startups and seed stage – but can also be used by business owners who are later in the business cycle but are looking to fund new ideas. If these types of business owners can’t get the money from a friend or family member who believes in their idea (business means big bucks, and a lot of times close acquaintances just can’t help out) they are usually able to do so through a Venture Capital investor who strongly backs their business plan. What complicates this process is the fact that most investors will want to see revenue generated for the long-term. They are now part owner and in it for the long haul just like the main business owner themselves, generally looking for a return of at least 5x their initial investment amount.  

Venture Capital investors or companies will analyze to see if there is a market for a business owner’s idea. If they feel that your business won’t be success, they most likely won’t take the risk of investing any money into it at all. Their goal is to see a big profit and have a hand in many major business decisions. It’s usually not simply a labor of love. Expect for investors to ask for a C-Level title and/or seat on your board of directors if you have one. At the very least, they will usually ask to be an “owner.” This results in relinquishing full control, ownership and an agreed upon percentage of future earning until you have enough capital to buy them out.

When it comes to qualifications, Venture Capital investors or companies typically only fund businesses in the amount of $1M or more, and also only fund specific industries which puts limitations on many business owners. They tend to look for big industry-specific companies with big, commercial ideas, a strong team, and some existing momentum and paying customers. This can be great, however, if you are just starting out, run a company on your own, or don’t necessarily have the plan to back up such a large sum of money, this can prove to be extremely overwhelming. Garage Technology Ventures, an early-stage venture capital funding company highlights the specifics of these qualifications in their article Critical Factors for Obtaining Venture Funding. Aside from all of  this, finding a reputable investor in itself can be a tough task. You should always do extensive research to ensure the investor has you and your business’ best interests at heart. Vivek Wadhwa’s article, Venture Capital: The Good, The Bad, and Ugly on Bloomberg.com highlights some other important factors when it comes to considering Venture Capital. Check it out.

WORKING CAPITAL FUNDING

Working capital is sought after by business owners for any number of reasons during any stage of the business’ lifetime – including the startup stage (normally lenders require a business must be operating for at least 3 months, but this can still be considered the startup stage). The capital is usually used for equipment purchases, new hires, expansion, inventory, and more. While lenders generally do care about the product or service the business offers, what business owners do with the capital (within reason) is their business. They are no way, shape or form now an owner after funding a company and don’t require that you list them as an owner, sponsor, or member of your board of directors. You make all of the business decision and once the funding is paid back their is no further obligations.

Typically, to qualify for working capital funding by a lender, a business owner must provide 4 months of recent bank and credit card statements (if applicable) to show their ability to pay back the advanced money. This capital acquired is generally structured as either a loan with fixed payback terms and fees or a purchase of future receivables at a discount rather than an investment expected to generate 5x the initial amount. Most business owners sleep a little better knowing this much and even reach out for additional capital numerous times over the course of their business’ lifetime. Lenders tend to develop genuine and trusting working relationships with many business owners and offer various financing solutions to work harmoniously with a business.

At Excel Capital Management, we offer many different financing products to help you obtain the Working Capital your business needs to grow! Our funding specialists will work diligently to ensure that you receive the best products available to achieve business success!
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Exclusive Interview with North Shore Advisory Inc. Credit Expert, Tracy Becker

New York based national Credit Restoration & Education Company, North Shore Advisory, Inc. has helped thousands of individuals and companies throughout the United States for over 25 years. Founder and President, Tracy Becker, a Certified Expert Credit Witness, Certified Fico Professional, and established author (check out her latest book, Credit Score Power), has lead her team to improve the overall financial condition of thousands of companies over the years, improving their credit, saving them millions of dollars, and providing seminars and counseling to educate them on building and maintaining excellent credit scores. Tracy has educated the likes of Coldwell Bankers, Halstead, Citi Habitats, and developed partnerships with many loan professionals from banks like Chase, M&T, HSBC, TD Bank, amongst others. She  has also often been quoted in publications such as the NY Times, American Banker, Investment News, Daily News, and many more. Excel Capital Management recently had the pleasure of interviewing Tracy in hopes of providing small business owners with insight on achieving a healthy credit scores and how it affects the overall growth of their business. Enjoy!

Excel Capital Management: Thanks for taking the time to chat with us Tracy. To start off, can you tell us a bit about how you got into your industry?

Tracy Becker: My husband was a real estate investor back in the 80’s and when the market crashed he was forced to claim bankruptcy. I was in the financial planning industry at the time.  After the bankruptcy was completed, we started researching how he could improve his credit.  After a lot of hard work and energy, we were able to better understand the industry and substantially improve his credit score. Together, we decided it would be a great business idea since so many people had credit issues and there was little information about how to improve credit at the time.

ECM: With the help of experts such as yourself and the North Shore Advisory team, credit repair has been made easier for individuals and business owners alike. Can you tell our readers a little bit about what your company does?

TB: There are many credit repair firms that have popped up in the last 5-7 years.  Most of them do what we call “generic letter writing campaigns” which require minimal work effort and almost no strategy. These firms put very little thought into creating the right system to improve credit, which keeps the cost down, but ultimately produces poor results.  At NSA, we review each credit profile by analyzing all of the information on the accounts and listen to our client’s story so we can learn about the circumstances surrounding the delinquency. We prioritize our client’s goals and consider the time frame that the client has to reach a certain score.  After we gather all the facts, one of our FICO Certified Negotiators does a forensic analysis and puts together a personalized strategy that will create the greatest chance of success. If we feel that we will not have success, we do not offer our services. Our program includes access to our credit education site where clients can learn tricks and tips through proper credit management.  This site helps clients increase scores while we are working on credit improvement through removing or changing delinquencies. Our FICO Certified Negotiators keep clients up to date on changes to credit  scores and the status of their file. Our unique credit repair programs have delivered great success to our clients.

We provide excellent programs for improving and monitoring business credit as well. In today’s fast paced business world more partners, lenders, and potential accounts need to make quick decisions as to which suppliers, borrowers, and partners they want to work with; decision-makers use a variety of business credit scores, indexes, and reports to discard unqualified candidates from being considered for a partnership or a loan. Because the business credit industry is highly unregulated, most firms do not even know their business credit scores and indexes are being reviewed. What do I mean by this? Unlike personal credit, when a business’s credit profile is pulled, the business owner is typically not notified. Our business credit repair process places firms in the most attractive thresholds, so that they are prepared for an unexpected review. Our monitoring program monitors business credit levels regularly so that owners may rest easy knowing that they will always have their best foot forward.

ECM: For someone starting out or someone trying to bounce back, aside from a credit repair program, what are others ways for individuals and business owners to build up their credit?

TB: The best thing to do is to order your business and personal credit reports; once you have your reports, you can reach out to our Credit Experts and they will give you feedback on the options available to you. In many cases, those that have no need for our services will still receive excellent advice about what their next steps should be.

ECM: Do you see a significant difference in credit score amongst different age sets? For instance, what patterns do you see amongst people in their early twenties, thirties to forties, and fifties and up? What about credit scores based on a person’s background and location?

TB: Honestly, it is hard to make an assumption about that since we typically service people who need credit improvement; we are not usually exposed to individuals with good credit or individuals that are not interested in their credit profile because that isn’t our line of work. I can say that older generations usually have more credit since they have had more time to develop it; and many studies suggest that millennials are the generation with the least amount of credit education, which often leads to unintentional poor credit habits; the most important advice for anyone at any age is to get educated and take care of your very important credit profiles since they are a great asset.

ECM: With the economic downturn in recent years, there seems to have been a shift in what makes a good to excellent credit score? For example, a few years ago, a credit score in the mid 600s and low 700s was considered “great” credit. That’s not always the case now. Would you agree that things have changed? How has this impacted your industry?

TB: Things changed dramatically. Banks have become more restrictive when it comes to personal and business lending alike, therefore, they require individuals to have a higher credit score threshold to receive the best pricing.  From an outside perspective, it makes sense since there was such great financial loss as a result of lender flexibility with credit score thresholds.  

The economic downturn really influenced our industry; it brought in a substantial amount of firms that tried to cash in on the credit score downturn. These fly-by night-firms attracted and continue to attract credit challenged individuals with their low pricing but they deliver minimal success and take money from those that should probably not be using a credit repair firm.  In my opinion, it is immoral to take money from someone who can barely pay their bills when you know they will have a new late payment dropping the scores yet again. Consumers should be wary of companies that will work on credit without asking them any questions about their current financial situation and goals. For businesses, the lending industry has changed as well. There is greater emphasis on business credit scores/indexes; however, many business owners do not understand the indexes and are not aware that a lender or a potential partner can view their scores at any time without notifying them. All business owners should have full knowledge of their Dun & Bradstreet, Experian, and Equifax business credit reports/scores and indexes. If they are not in excellent standing, they should reach out to us for a full credit analysis to see if we can help.  

ECM:  In the past few years, a person’s credit worthiness has also been investigated via social media sites and other avenues (read more on that here via NPR), rather than just based on a credit score alone from the top three bureaus. Can you elaborate on this? Do you believe a social media footprint should affect a person’s credit report?

TB: There has been much talk about social media scores, but social media outlets have backed away from the idea of using social media scores to determine creditworthiness because they would have to abide by the same regulations as the credit bureaus. The concept opens up a lot of risk and possible litigation; I do not believe we will see much of this in the near future since it can be viewed as discriminatory. I do believe decisions can be made using credit scores and gathering information about a firm’s presence on social media to decide if they are a vibrant and active entity.

ECM: At Excel, we focus on providing small to mid-sized businesses with financing solutions such as Merchant Cash Advances, Asset Based Loans, Unsecured Business Loans, and more. A lof of business owners choose these solutions due to minimal requirements. For instance, there’s no minimum FICO score requirement. What is your take on this?

TB: There is a place for all of these financial vehicles if used correctly. I think it is great to have as many choices as possible. The ideal position for any firm is to have excellent credit for both the business and the principal(s). This will provide more opportunity to choose which financial vehicles are best for them with the help of professionals at Excel.

ECM: Lastly, Tracy, what advice would you give to business owners, such as millennials, who may have little to no personal and/or business credit?

TB: It is very important to start building credit. With limited or no credit getting a secured credit card would be the first step. Make sure the card will be reported to the credit bureaus. After using the card for 3-6 months, I would suggest that you apply for a non-secured card and use that as well. Following these steps can slowly help build excellent credit; as long as all accounts are paid on time, scores will increase. If you would like to learn more about credit visit our site to read many related articles www.northsoreadvisory.com. As far as building business credit that is a bit more complicated since not every vendor, lender, or creditor reports to the credit bureaus.  The best step is to reach out to us to discuss the best strategy for your unique business.

To learn more about the business financing solutions, Excel Capital Management offers, check out our Solutions Page. To learn more about the Credit Repair and Restoration solutions Tracy Becker and North Shore Advisory offers, visit: http://www.northshoreadvisory.com/

North Shore Advisory Inc. Credit Expert, Tracy Becker
North Shore Advisory Inc. Credit Expert, Tracy Becker

The Excel Interview With deBanked’s, Sean Murray

Debanked

Merchant Cash Advance industry veteran, founder of deBanked, Sean Murray has been an influential part in funding over $100 million to small businesses through sales and underwriting efforts. As a Senior Account Executive at Bizfi (part of the Merchant Cash and Capital family), he grew one of the largest residual portfolios in the history of the company and become a well-respected expert in the industry. After his time at Bizfi, Murray founded Raharney Capital, providing advertising and consulting within the alternative lending industry, and also deBanked – the most popular magazine and resource in the industry where Murray also serves as the Editor-in-Chief. Excel Capital Management recently sat down with Mr. Murray to explore his vast knowledge of the Merchant Cash Advance and alternative finance industry and discuss the future of the business.

deBanked sean murray

Excel: Tell us a little more about your background and what made you get into the alternative finance industry.

Sean: I got into this industry almost immediately after college. That was 10 years ago. A friend of mine told me there was an opportunity to work at a fun financial startup. The job description entailed evaluating small businesses for working capital, ones that had mainly been declined already for a bank loan. Given that I double-majored in Accounting and Finance, I was definitely intrigued and took the job.


Excel:
You’ve been in this niche industry for quite some time. Over the years, how have you seen the industry change and grow?

Sean: In the beginning, the worst part for the small business owners I spoke to was that approval terms were tied entirely to their average monthly credit card processing volume. That meant if cash sales were 90% of their business, we couldn’t consider that, even if that cash was showing up in their bank statements and being declared on their tax return. Over time, funding providers became more creative and flexible. They found ways to better service clients without making it impossibly hard to qualify.

Excel: Did you ever expect the industry to become as popular and as competitive as it is?

Sean: Yes and no. Given that I started before the Great Recession, there was already a big need for non-bank alternatives. The industry already existed and was growing. It wasn’t a byproduct of an economic downturn, it just became more visible during one. People think that when the economy fully heals, that banks will start lending again and the non-bank alternatives will disappear. The truth is that banks never serviced this segment of small businesses. It was and remains to be too expensive, risky, and time consuming for them to underwrite a $20,000 business loan. Sure, they’ll issue you a business credit card, but that’s based on your personal credit, is personally guaranteed, and more often than not the limit is too low. So no, I am not surprised that the industry has become so popular but I am surprised the product mix available to business owners has diversified as much as it has. It’s truly incredible.

sean murray interview
Excel:
In the latest issue of your publication, deBanked, you provide a few predictions on the future of the industry. You specifically mention the fact that it is an election year and touch base on the current state of the stock market. Can you elaborate on these topics and how they relate to the industry?  Also, speaking of the election, Democratic candidate Bernie Sanders has stated that he will impose nationwide interest rate caps that would, in the long run, hurt marketplace lenders. What are your thoughts on this?

Sean: I think what I was trying to say was that a new President sets the regulatory and legislative “tone.” This year we have a colorful group of candidates, many of whom have big ideas on how to grow the economy. Bernie Sanders in particular has made some pretty controversial statements, one being that he is in favor of a 15% federal interest rate cap on consumer loans. I think many people when they hear that, assume that would mean that a lender that normally offered a borrower a 28% interest rate loan would instead offer a 15% interest rate loan to comply with the cap. That’s not what would happen at all. Instead the lender would just decline the application. In effect, a huge portion of the population would not be able to get a loan from anywhere, not even non-bank alternatives. You know the saying, “it takes money to make money?” That goes hand in hand  with the “rich get richer while the poor get poorer.” Borrowing can be used as leverage to grow and in essence become richer. It takes money to make money. If you’re locked out from borrowing, supposedly for your own good, how do you become richer if your risk profile makes it legally impossible to take money and make money? That’s obviously a larger debate but it all feeds back into the upcoming election and who will be running the country. What will their economic views be? And will that “tone” positively or negatively affect small businesses? Nobody likes the uncertainty in the meantime.

As for the stock market, the connections are easy. Declining stocks increases the allure of investing on peer-to-peer platforms where the returns are perceived as both steady and rather lucrative. It can be hard to stomach a 10% loss in your investment portfolio in a matter of weeks like the stock market did in the beginning of this year. Investors, even small retail investors are going to consider alternatives like this industry. A declining stock market also chips away at wealth and this can affect consumer buying behavior which would impact small businesses. It’s all related at the end of the day.

Excel: Along the same lines, what are your the thoughts on the alternative finance industry being regulated? Do you see this happening anytime soon? If so, how will these regulations affect business?

Sean: I think regulation, if any, will focus on disclosure and transparency. If this is indeed where it goes, I just hope the outcome is intelligent, well thought out and logical. It’s early days right now though so it’s hard to speculate. In business-to-business transactions such as the kind your company engages in, I’m a big believer in the invisible hand. It’s commercial finance, not consumer finance. Some of these businesses might be really small, but we’re still for the most part talking about corporations entering into contracts with other corporations. I think regulations should focus on consumer lending, where there is a much lower presumption of sophistication.

Excel: Moving forward, what impact do you believe the collaboration between OnDeck and Chase will have on the industry as whole?

Sean: From what I know about the partnership and from what I know about banks, I believe Chase is probably using this as an opportunity to fast track their online loan underwriting process while they figure out a longer term technological strategy. You have to remember, it’s not uncommon for banks to be using really old systems. I believe some are still using or have just moved away from Windows XP recently. That’s a 15 year old operating system. Between that, constant bank mergers where the acquired banks are using completely different systems, regulations, and the sheer size from a human resources perspective, all make it nearly impossible to catch up, let alone implement a modern underwriting platform that measures 10,000 data points with connections through all sorts of APIs. The easy solution for now is to use a company that can reliably provide that capability and I think it’s great that OnDeck’s platform instills a level of confidence that a famous bank like Chase would attach their brand to. I think OnDeck and others will score more of these partnerships and there is potentially a play for one to be ultimately acquired by a bank just for the technology.

Excel: As this industry continues to grow and more people are entering the market, what is one piece of advice you can share about the do’s and dont’s of our marketplace?

Sean: Do be responsible and act with integrity at all times. Don’t think you are too small or insignificant to make a difference. If you only help fund one small business and they hire new people as a result, there’s a chain reaction that occurs that affects the entire local economy. It’s a beautiful thing to play a role in that.

Why Contractors Have Hard Time Getting Business Funding

construction loans

Even in a favorable economic climate, where housing starts are up, contractors have a hard time getting loans in the traditional sense but Excel specializes in Construction business loans.  Since no more so than ever banks view contractors as high-risk and they are subsequently far more selective when underwriting loans. The lack of financing options makes it difficult for many contractors to meet payroll obligations, purchase new equipment, and access capital when there is a lull between jobs or if payment from clients aren’t received in a timely fashion.

In most instances, the concern over the inherent risks of lending to contractors appears justified. In his book Analyzing Construction Contractors, Dev Strischek indicates that contractors have a higher failure rate than other small businesses and these failure rates only increase during economic downturns or recessions. It then becomes apparent, based on both the failure rate and the correlation with economic cycles, why contractors are considered high-risk.

Here are some of the additional reasons why small business owners and contractors might have a hard time securing financing through traditional channels:

  • Inconsistent Revenue or Cyclical Business – a business may depend on the weather, there might be downtime in between contracting jobs, or there could be a sustained recession that is having industry-wide impact
  • Home-based Business – lack of a traditional brick and mortar shop lends itself to the notion of a transitory or unstable business
  • Lack of Collateral – a contractor that works out of his or her home and leases the majority of their equipment may lack any assets that can be put up as collateral for loans
  • Bonding Obligations – contractors are often bonded. Banks recognize that these bonding agencies hold a legal claim on assets above any creditor should the business fail
  • Perceived Lack of Business Acumen – contractors may be highly skilled in their jobs, but the perception may be that they lack the marketing, bookkeeping, and business skills necessary to run a successful small business
  • Heavily Impacted by Downturns in the Market – as stated before, a contractors business is often directly tied to the state of the economy and, more precisely, the housing market

The lending practices of banks have left a definitive gap in the marketplace, but there have been third party institutions springing up to meet the needs of contractors and attempt to fill that gap. In her article “Online Banks Fill Funding Needs for Small Business,” author, and former SBA Chief, Karen Mills indicates that there is reason for optimism in the alternative financing realm. She states, “the outstanding portfolio balance of online lenders has grown about 175 percent a year.”

So it is not all doom and gloom for contractors. There are alternative options for securing loans. Here are just a few of the non-bank financing options available to contractors:

  • SBA – the Small Business Administration is not a direct lender. Instead, the SBA works with local banks to guarantee small business loans. Their guidelines are as restrictive as the banks, but a guarantee on a loan greatly increases the chances of contractors obtaining financing.
  • Online Banks – there are on-line banks that supplement the brick and mortar banks that offer additional opportunities to secure financing but typically have similarly restrictive lending practices.
  • Non-traditional Funding Sources – this is the greatest source of optimism for contractors. These online, non-traditional lending partners are changing the face of contractor financing. They include direct lending, peer-to-peer lending and even factoring companies.
  • Equipment Lease Options – if the proceeds of a loan are for the sole purpose of purchasing equipment, contractors should consider leasing as an option. Leasing requires less capital and can come in different term lengths to meet the specific needs of the contractor

Despite their relative small size, non-traditional and online funding sources have the potential to change completely the way contractors obtain financing. They focus on customer service, are more open regarding their requirements, and they ultimately foster greater competition for the contractors’ business. Some of these alternative lenders include Prosper, Lending Club, Excel Capital Management and Funding Circle.

To improve the chances of securing financing – whether it’s through traditional or non-traditional sources – contractors should focus on the following areas. Addressing each of the following will drastically increase the chances of success.

  • Be prepared to provide tax documentation and a well-maintained balance sheet
  • Define exactly how the money is to be used and how it will impact the business’ bottom-line going forward
  • Address a plan for market downturns by soliciting referrals, utilizing direct marketing, or focusing on a Social Media strategy. This approach will demonstrate a realization of the cyclical nature of the business and provide evidence that the owner is attempting to mitigate the impact.

Contractors and business owners need to recognize that, as with most present-day industries, the traditional lending model may no longer fit the market. Innovation has extended well beyond technology products to impact everything from taxi cabs to startup funding to grocery shopping. There has been innovation in small business lending as well, and contractors and business owners have begun to turn towards this burgeoning alternative funding market to finance their long-term success.

10 Reasons to Be Glad You’re a Woman Entrepreneur

10 Reasons to Be Glad You’re a Woman Entrepreneur

I’m glad I’m a woman.

Actually, I’m glad I’m a Woman entrepreneur, and you should be too.

I’ll tell you why in a minute.

For a moment I’m going to talk about all the things women in business already know:

We still live in a society where men are the typical, almost preferred, leaders in any type of industry.Surprisingly, women are often content to take a back seat rather than fight for position. We all know what it’s like to be labeled “THAT” type of woman! The one that charges over everyone to get to the top. The aggressive workaholic that would rather order people around than show compassion or a softer side for fear of being weak.

The glass ceiling is alive and well. While we’ve made some progress in this area, women still don’t get paid the same wage as men for doing the same job. Worse yet, often women aren’t even given the opportunity to fill those positions “reserved” for men. For years I’ve worked in the private sector – new home construction. As you might imagine, the construction industry is definitely very old school and very much still a “Good Old Boys Club.”

When I started there over 28 years ago, I had high aspirations of becoming an officer of the company and made my plans known all the way to the top. There was one woman in that position which gave me confidence it was possible to achieve with dedication and hard work. So, I put in my time, became an expert in almost every facet of the organization, earned the respect of my co-workers and management, and even made some money for the company through innovative suggestions. Watching promotions go to men within the organization over the years was disheartening, but there was still that one woman in a leadership position. The only problem – she never seemed to do anything remotely involved in decision-making for the company. She, too, did her job well but never embraced the role of leader. Well, she retired this year. What surprised me the most while attending the going away lunches and parties in her honor, was that never once was it mentioned that she was Corporate Secretary for almost 40 years. Then it struck me, the officer position she held was merely an attempt at political correctness; to, at least on the surface, appear to be a forward-thinking company. Last week the president sent out a call to action to his all-male management team. In it, he listed eight employee names in consideration for the vacant officer’s seat. My heart skipped a beat. Surely, now was my chance. Of course, you guessed it, my name wasn’t on the list. Among the eight names were six men and two women. Another skipped heartbeat with the possibility that some other woman might make it to that honored status. The candidates? A woman who has been with the company for four months and the other in poor health and close to retirement. The all-male management team will vote next week. What do you think will happen?

Women don’t ask…for help, for money, for anything that is going to make them appear less independent. There have been a number of studies to substantiate this point. Linda Babcock of Carnegie Mellon University indicates the main reason women still earn approximately 78 cents to every dollar men earn, is their unwillingness to negotiate for higher pay. Data shows that men are also four times more likely to ask for a salary raise than women, leaving thousands of dollars in unearned income on the table.

A brave and talented childhood friend shared a story about her very slow rise to success. She’s a buyer at a prominent fashion retailer in New York City today, but it was a hard-fought battle that brought her there. Molly was always considered the “fashionista” of our tight-knit group of BFFs. You know the type, the pretty little thing that could pull off mismatched knee socks (before it was popular), layer-upon-layer of everything in her closet, top it off with her favorite scarf and call it her “style.” Somehow, she made it work every time. When she grew up, no one was surprised that she pursued a career in fashion. She put in the work, got her degrees, and finally felt ready to tackle the world. The only problem…she was a large talent in a small town. After years of searching for the perfect job and making minimum wage in her comfortable home town, she realized that her opportunities were limited. She jumped from one boutique to the next with little chance for growth. She told me that the male-dominated retail industry in our cozy community left little room for her fashion-forward ideas. To them, she had amazing potential as their head sales clerk, because she was cute and friendly.

Molly finally had enough. She took a leap of faith and headed to the Big City. With no job, no place to live and just a little bit of savings, she got on a bus and headed east. Can you imagine? Molly found out the hard way that if she wanted fame and fortune, she had to reach for it. It was risky, but worth it in the end. Her only regret? That she waited so many years before making the move.

You might be thinking that these are isolated instances or limited to certain industries, but that’s not the case. Consider the female-dominated nursing profession – in a field where women outnumber men 10:1, you’d think the women would have an overall advantage, especially in earnings. Nope. According to the latest Census data available from 2011, female nurses earned 7 percent less than male nurses. The phenomenon where men earn higher wages, obtain faster promotions and concentrate on achieving positions in the highest-earning segments of their field even encroaches into the healthcare industry.

Does any of this sound familiar? While I don’t really consider myself much of a feminist, I am convinced that in order to break stereotypes that still exist in business today, real change has to start young. And there are initiatives that are working toward this goal. For example, the Girl Scouts have adopted a “Win-Win” badge where girls are required to accomplish a series of negotiation skills to earn it. In addition, researchers at the Greater Good Science Center at the University of California, Berkeley have identified empathy as a critical skill needed to reinforce stronger interpersonal connections, better collaboration and team building from childhood through adulthood. Preschool and other childhood educational programs are being geared toward early adoption of these skills for both boys and girls.

It’s a start; and hopefully future women entrepreneurs will find a more balanced playing field. Already statistics are showing improvement with an increase in the number of women-operated businesses and financing options available for all small business ventures.

Okay, now I’ll tell you why I’m glad I’m a Woman entrepreneur.

While I’m always going to root for the underdog, being considered one just makes me mad. It would be nice to have a fair playing field in business, but life’s not fair. Being an entrepreneur has taught me to be a problem-solver when faced with obstacles. Being a woman entrepreneur has given me practice.

And I’m not alone. Statistics from a 2014 Womenable-authored report published by American Express OPEN confirmed there were close to 9.1 million women-owned firms, generating over $1.4 trillion in revenues in the United States. Between 1997 and 2014, the number of women-owned enterprises increased by 68 percent – the fastest growing segment among all others over that period. Think about that for a minute. Are you surprised? I was.

There are a number of areas in which women excel, and that, if used properly in business, should give them an edge over their male competitors. I’ll list the top 10 reasons I’m happy to belong to this group, but feel free to add your own.

  • Key demographic. As part of a growing market niche, my company will receive targeted incentives, discounts and offers in an effort to capture my business. Marketing 101 teaches students to focus advertising dollars on growing segments of a particular demographic to achieve maximum return on investment. I love all the extra attention, and it’s a great opportunity to test out my negotiation skills.
  • Someone to ask. At the risk of being a little stereotypical myself, I always laugh when I hear jokes about men never asking for directions – because it’s true. While I understand there are tools and equipment out there to get you where you need to go, I’m happy that I don’t have to take this entrepreneurial journey alone anymore. With the growing numbers of women in business, my ability to ask for advice, and a willingness of many who have gone before me to share their experiences, the road to success will be a lot smoother.
  • Excellent multi-taskers. While the term may be passé, the ability to juggle many things at once is not. Let’s admit it, women often overextend themselves because they can. While I would like to focus my efforts on just one thing occasionally, I really am proud that I’m capable of managing multiple tasks simultaneously. Besides, I never get bored.
  • Great communicators. Being a woman entrepreneur opens up many opportunities where my voice can finally be heard. Remember, I’m part of a growing demographic, so I can talk or write all day and everyone will listen.
  • Passionate. I’ve often heard people say that women are too emotional to be successful business owners. What? The reason I started my business in the first place was because I was passionate about it. I’m excited to belong to a group that cares deeply about making a difference in the world, even if it means shedding a tear every once in awhile.
  • Embrace the gray area. I know there are women business owners that do everything “by the book” and follow a straight path toward reaching their goals. The difference between men and women, though, is the gray area. Most of the men I’ve worked with in leadership positions like black and white answers. In other words, they want a yes or a no. They don’t want to hear the details or an explanation – the gray area. Luckily, I know that some of the best solutions are lurking in the shadows.
  • Innovative. Obviously, this reason isn’t only reserved for women entrepreneurs; there are many innovative men. Women have a unique perspective on life and how the world works. Creative ideas are often borne from empathy or a desire to improve the world around us. The nurturing component of a woman’s DNA may often lead to new ideas.
  • Problem-solvers. Think quick! Your alarm didn’t go off this morning, you’re running late for a meeting, your car’s gas gauge is on empty and you only have $2 in your wallet. What would you do? The answer doesn’t really matter. The fact that you figured out a solution has proven my point.
  • Perseverance. While many women-owned businesses may struggle or even fail, I’m always impressed by the stamina and the ability of most to try again. The path to running a successful enterprise is rarely without obstacles. Learning from the challenges we encounter and continuing to push forward are powerful tools I’m proud to possess.
  • Alternative financing options. With the number of women-owned businesses increasing every day, funding opportunities to keep those businesses running and growing are changing and expanding. Women entrepreneurs are no longer limited to traditional resources and may find better choices through alternative financing to fit their immediate and long-term needs. The top funding options for women with established businesses now include: Traditional bank loans, secure Small Business Administration-guaranteed loans, financing assistance from family and friends, home equity loans, trading future earnings, crowdfunding, angel investors and venture capitalists. In addition, there are more alternative financing options available such as Merchant Cash Advance, Revenue-Based Factoring and Asset-Based Lending that offer easy application and approval processes, no credit or collateral requirements and fast disbursement options.

Of course, I haven’t listed all the financing options available to small business owners – male or female. It’s possible you could win the lottery or find a bag of money on your front porch. More than likely, you’ll need to be resourceful, tenacious and a problem-solver. In other words, be yourself. There are always going to be challenges in business. Just understand that you’re not alone, and there will always be an answer. With alternative funding solutions available from Excel Capital Management, you’ll never have to worry about accessing the cash you need for upcoming expenses, and instead, you can focus on your success.

    See, now aren’t you glad you’re a Woman entrepreneur too?