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7 Money Saving Tips for Small Businesses

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Money Saving Tips for Small Businesses | Excel Capital Management

Everyone loves saving money and small business owners are no different.  Although having a tight budget can make saving money tough, here are some money saving tips that can help your business budget.

7 Small changes that can help you save big in the long run.

1. Save Some Paper by Going Paperless

Reduce the amount your business uses paper and postage by working electronically. Going paperless is a great way to increase efficiency and reduce waste and clutter. These changes help lower costs while helping the environment.

2. Don’t Be Afraid to Shop

In addition to loyalty programs and selling in bulk, many retailers and vendors you work with may offer discounts for small businesses. Even if they don’t advertise it, take the initiative to ask. You’d be surprised how much money you save simply by inquiring.

Comparing vendor rates also ensures that you get the most for your dollar.

3. Create a Budget and Track of Expenses

Seemingly small charges add up quickly. Keeping track of your finances by creating a budget allows you to identify the best areas to allocate money. Another helpful tip is to create a log with all of your bills and due dates. Setting a “pay date” several days before the bill is due is an easy way to ensure your payment is received on time and avoid late fees.

4. Upgrade Your Tech

Nothing is worse than coming into work with the drive to get things done only to have your momentum halted because equipment doesn’t work. When troubleshooting becomes a large part of your day, it can severely cut into productivity and progress. Avoid this by replacing outdated or broken equipment.

5. Balance Transfer on a High-Interest Credit Card 

Many business owners have a business credit card that has a high APR attached to it. For some its comfortable to use the same card since its already opened and is linked to many recurring business expenses. However, there are many cards that offer a 0% interest introductory rate for up-to 18 months. CreditCards.com has put together a comprehensive guide with the best offers for balance transfers. To check it out you can view it here.

6. Adopt a Four-Day Work Week

It may seem counter-intuitive, but 4-day work week can help motivate employees to work with focus and more efficiently. Reducing the number of workdays forces you to cut back on time-wasting tasks. Instead of employees having to take days off for doctor’s appointments and other responsibilities,  a 4-day workweek provides the flexibility needed by everyone.

7. Allow Employees to Work from Home

If you aren’t fully convinced by the idea of a 4-day workweek, a good alternative is to let your employees work remotely. Today’s technology allows us to stay connected and work on-the-go. As long as your employees are motivated, engaged, and enjoying their job, they will want to do great work.”

If you find yourself in need of extra funds, Excel Capital Management can help fill in the gaps. Our consultants are available to guide you towards the best options for your business’ needs.

Working Capital Loans: Top Uses and How to Get One For Your Business

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Top 5 Uses of Working Capital | Excel Capital Management

What are Working Capital Loans?

There’s nothing more stressful for a business owner than not having enough cash to cover working expenses or other operational costs. Working capital loans are the perfect solution to the slow rigorous bureaucracy we call banks.

Most business owners find themselves in need of extra cash at some point in the company’s lifetime. Slow sales, new competition, a seasonal business model, unforeseen circumstances and unexpected opportunities are all factors that can cause cash flow problems.

Worst of all, these kinds of issues usually crop up when we least expect them to.

Everything is smooth sailing until it isn’t, and when these financial crunches occur in most businesses there’s little opportunity to correct course fast enough to avoid some pretty sticky financial situations.

Fortunately, there are working capital loans – just the thing your business needs when you’re in need of an immediate injection of capital. Financial packages like these can get you out of those sticky situations and actually position you for success at the same time.

Do I need working Capital Funding?

Whether you are having trouble paying your operating expenses, have an equipment breakdown or just a slow month, working capital loans are at your disposal (usually with just a click of a few buttons). These are the kinds of loans that can save your bacon before it hits the frying pan.

Working capital loans give you the ability to pay those working expenses and continue daily operations while generating the revenue necessary to run your business smoothly without sweating a temporary crunch. You’ll be able to keep rocking and rolling, striving for that positive cash flow you need as a business, without having to wonder where the next big financial crunch in your operation is going to come from with the help of working capital loans.

With the evolution of Fin-Tech, you’re not limited to a single type of business loan product. Excel now offers a variety of Working capital loan options all catered to your specific business needs.

 

Complete our online application and discover how much you can be approved for: Apply Now

 

In short working capital loans is any cash or credit usually delivered via a business line of credit or an unsecured business loan or any other type of financing which offers a solution to a business’ day-to-day operations and financial needs. The beautiful thing about acquiring working capital for your business is the fact that it can be used for virtually anything (as long as it pertains to the business itself). Here are the top five ways in which many business owners choose to use their working capital.

What is Working Capital

Working capital is any form of cash or funding that is used to operate a business. Most business owners look at working capital as the lifeblood of operations. It helps keep things running smoothly and efficiently. Without working capital, expenses can’t get paid and can be harmful to your business existence.  Working capital can be acquired or saved but it is the cash available to use on a day to day business to operate a business.

What Are the top 5 Uses of Working Capital?

We have helped deliver capital to thousands of business owners nationwide and have seen it all. We have put together what we see the most often.

Inventory and Equipment Purchases

Many business owners choose to use working capital to take advantage of bulk pricing on inventory and equipment. Similarly, equipment such as machines, computers, vehicles, and more can reach well into the thousands of dollars. Because many vendors require a large upfront payment for this type of pricing on inventory and equipment, working capital gives business owners the funds they need to purchase the items they need before it’s too late.

Expansion

Once your business gets through the startup stage and figures out a regular routine, the best time is when there is just too much business to keep up with!

Many business owners find themselves needing to expand and grow to keep up with the demand. Working capital can be put to use to open a new location, build onto an existing location, add on additional parking, and much more!

The Net Working Capital Formula can also provide you with a chance to take advantage of hot opportunities that may not present themselves ever again, even if your cash and capital reserves on hand right now aren’t quite as viable as have like them to be.

These are the kinds of opportunities that can explode your business capacity, take you to the next level professionally, and open up a world of financial opportunity that simply wouldn’t have existed otherwise.

Unfortunately, no one really knows when these financial opportunities are going to start knocking at your door – but luckily, with the help of working capital loan packages and the Net Working Capita Formula you will be able to jump on board the chances for growth whenever and however they present themselves.

New Hires and Employee Training

Another form of expansion can be hiring new employees. Once your business starts to boom, you may need some extra help. Maybe you want to hire additional cashiers for your store. Maybe your restaurant needs additional wait staff. Maybe your doctor’s office needs another receptionist. Maybe you even need to hire a few accountants to help take care of your finances. Additionally, many of these employees will need adequate training. Working capital can be used for all of these things!

Unforeseen Problems

Unfortunately, with every business, problems do arise. Equipment fails, vehicles breakdown, natural disasters occur, employees, leave. The headaches are unforeseeable and can be expensive, but working capital can help to cover the costs in a matter of a few days.

Business Expenses

By acquiring working capital loans for your business, you will be able to pay for things that may have been unaffordable in the past. You may need office supplies, new computer software, or you may have a few bills to pay. These payments can all be made possible with working capital.

At the end of the day, the right working capital loans have the potential to help you build and grow the kind of business you’ve always dreamed of owning and running.

Before acquiring a working capital loan it is very important to understand the cash flow of your business and how a business capital loan can affect the bottom line. 

The working capital formula is crucial in understanding this.

 

What is the Net Working Capital Formula?

Before you jump into the Net Working Capital Formula you have to understand what is net working capital. Net working  capital is used to calculate the liquidity of a company by calculating its current assets that can be used to pay off its current liabilities. This calculation is very important as it’s used by company executives, vendors and other creditors to see how efficiently the company case use its assets and get a general idea of the company’s short-term liquidity.

The amount of current liabilities a company has in the current year is the primary focus of the Net Working Capital Formula which focuses account payable, any sort of debt from trades and also notes from other vendors.

On top of that, you’re also going to have to fundamentally understand the Four C’S Of Credit and how they are going to impact your ability to take full advantage of net working capital loans(as well as how they are going to impact your viability as an entrepreneur and business owner in general.

A lot of business owners and operators are under the impression that they’ll be able to utilize nothing more than their sales, revenue, and other business assets to take full advantage of financing packages from operations like net working capital.

And while that may be true to a point, at the end of the day the Four C’S Of Credit are always going to have an impact on your finances – and you have to be sure that you are doing everything you can to maximize those key criteria to leverage financing as often as possible to grow your business and accomplish the kind of financial future you’ve always dreamed of.

We’ll dig a little bit deeper into the working capital formula, the 4 C’S Of Credit, and how they all come together in the Net Working Capital Formula in just a moment.

To calculate the Net Working Capital Formula you have to all the current liabilities your company has from all the current assets of your company.

The assets that are put into consideration when calculating the Net Working Capital Formula are current cash, account receivable, all investments (short-term) and the current inventory the company has. These are the assets that have the most viability to financiers like net working capital, and they are the assets that are going to shine the brightest light on the financial health and wellness of your company on a regular basis.

It’s critical that you are able to produce information pertaining to these core assets before you get started looking to leverage the working capital formula. You’ll need to know exactly where you stand as a business financially before you start to dive deep into these opportunities, and only your own accounting will be able to provide you with those kinds of answers.

The current liabilities include account payable, taxes, all sorts of stacked investments, debt from trade and deposits from various customers. Liabilities should be kept to as much of a minimum as possible for smart and savvy business purposes, and companies that have a negative cash flow – as well as anything but solid 4 C’S Of Credit – are going to have a really tough time taking advantage of any financing packages.

At the same time, The Net working Capital Formula is always trying to help entrepreneurs and business owners across all industries and with a multitude of different financial outlooks. It’s still a good idea to reach out to our operations to see if you can take advantage of the working capital formula, even if your liabilities are a little bit higher than you expected or anticipated upon closer look.

A Better Understanding of the Four C’S Of Credit

Every financial lender out there is going to take four key criteria into account when they are trying to decide whether or not you qualify for working capital loans or financial packages, and those four key criteria make up the “4 C’s of Credit” that we’ve been talking about.

These criteria include:

  • Your character
  • Your collateral
  • Your credit score/credit history and
  • Your capacity to repay loans moving forward

Each of these four key criteria are big pieces of the credit puzzle, and it’s important that you do absolutely everything you can as an entrepreneur to maintain good character, to have collateral available to put up to secure the kinds of financing you need, to improve your credit score and bolster your credit history, and to prove your capacity to repay loans and financial packages with a positive cash flow.

As a nontraditional lender, net working capital has its own proprietary working capital formula to work off of when determining the worthiness of the applicants. But we can tell you that the Four C’S Of Credit are always going to play a role in this determination. It’s important that you do everything you can to improve those criteria, patch of any holes, and recover from any dings or dents that may have hit your credit in the past.

The Net Working Capital Formula has been designed to make it as easy as possible for qualified entrepreneurs to leverage cash and capital when they need it most, and while it relies on the Four C’S Of Credit for sure to boost and build your business there’s a lot more that goes into this formula man is immediately apparent on the surface.

To learn a little bit more about the working capital opportunities available, or to see if you qualify for these kinds of financial packages now, reach out at your earliest opportunity. We would be happy to talk a little more about how we might be able to build and grow your operation by working together!

Complete our online application and discover how much you can be approved for: Apply Now

4 Helpful Tips To Increase Employee Productivity

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4 Helpful Tips To Increase Employee Productivity

Every successful business owner understands that their company is only as strong as it’s weakest link. Improving and sustaining employee productivity is a must when it comes to running a successful operation. Here are a few helpful tips for increasing employee productivity and establishing healthy, working relationships with them.

Communicate, Communicate, Communicate.

Communication, as you know, is probably the most important aspect of being a boss and operating a business. Without proper communication skills, you and your employees will have a difficult time delegating tasks, performing day-to-day tasks, and ultimately, achieving business goals. As the leader, it is your job to find a clear and effective means of communication between you and your employees. Not only should you make sure employees understand what you ask of them whether through email, conference calls, or in-person meetings, they should also feel comfortable and safe communicating with you and others within the company about tasks, goals, ideas, questions, and concerns. Lack of communication leaves many people lost and confused. There is no room for that in a successful business.

Ensure Employees Understand Your Expectations

All businesses should have clear goals and expectations in mind. Your employees are there as assets to your company, therefore, everyone should understand what they are responsible for and what is expected of them on a day-to-day basis, and overall during their time at your company. A confused mind will do nothing, meaning it is your job to present a clear plan and opportunities for all employees to learn and grow. Everyone should know what they need to do at all times while striving to progress and do their job more efficiently, as well as learn additional skills to move on to higher positions.

Eliminate Negativity

You know what they say – misery loves company. The working atmosphere at your business is a very influential factor when it comes to employees and their performance. As a business owner, it is your job to ensure all employees feel comfortable and confident at work. Eliminate all negativity from both your side and your employees’. Observe the work environment and develop a way to remove or improve negativity. Lack of communication, lack of organization, lack of motivation, and pessimistic personalities are all negative traits that should be addressed and dealt with accordingly. Not everyday will be full of sunshine and happiness, however, this should not slow down productivity and drive.

Provide Constructive Criticism and Feedback

The number one thing that most employees appreciate in an employer is constructive criticism and feedback. Most people tend to work better when they understand what is expected of them, what they’re doing well, and what they could be doing better. Instead of simply reprimanding an employee for a mistake or incomplete task, meet with them to address what you expect to be done differently next time, what you feel was done well, and what you appreciated. Similarly, with a job well done, praise and rewards are a big productivity enhancer. Everyone loves to be rewarded for a job well done, and this doesn’t always have to go as far as a raise – a simple “good job” could brighten anyone’s day. Providing appropriate incentives and honest feedback is crucial when it comes to being a successful business owner and employer.

Summertime Sadness: How to Curb Slow Summer Business

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Summertime Sadness: How to Curb Slow Summer Business

So you’ve gotten through the holiday rush and spring sale seasons only to have business come to a slow creep. Don’t panic; you’re not alone. Unless you run an ice cream shop or sell beach gear, your business is bound to experience slow sales during the summer months. The following are 3 tips on how to help build your business by utilizing this time the best way possible.

Social Media Revamp

The summer months are the perfect time to focus on your social media presence. Many make the mistake of thinking that posting regularly is the same as successfully socializing with their followers, however, having a lot of content doesn’t help unless it is of quality and you engage your followers. Run summer themed contests, share photos of your staff enjoying the nice weather, post vacation pics or plans. Have fun and be creative! 

Tax Prep

Despite it occurring the same time every year, tax season always seems to take people by surprise. You promise yourself that you will never wait until the last minute again only to fall into the same trap. Prepare for the inevitable by gathering your receipts and organizing your finances. *Attention restaurant owners, we wrote a helpful a few months back titled: Tax Filing Tips for Restaurant Owners. Check it out!

Reevaluate and Reflect

Now that you’ve reached the midway point reevaluate your business’ goals for the year. Celebrate the goals you’ve successfully implemented and take steps to improve on the rest. Make sure that your daily actions reflect the goals you’ve set.

Reach Out for Working Capital


Just because business is a little slow, doesn’t mean you have to stop growing. Now may be the perfect time to reach out for working capital from an alternative lender. Alternative financing products such as the popular Merchant Cash Advance is a great solution for your business to purchase necessary inventory, hire new employees, train existing employees on new systems and business techniques, implement marketing campaigns, and much more!

At Excel Capital Management we know what you need to for your business to grow. Grant Cardone also wrote a great piece for Entrepreneur titled, “5 Sales Tips to Recharge During the Lazy Days of Summer.” Check it out! 

Exploring Funding Options for LGBT Owned Businesses

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Alternative Funding Options for LGBT Owned Businesses

June is Lesbian, Gay, Bisexual, and Transgender Pride month each year in honor of the 1969 Stonewall riots, a major turning point in the U.S. Gay Liberation Movement,  in Manhattan, NYC. Since those days, great strides have been made in terms of progressive thinking and equality. The LGBT community also makes up a large number of business owners in the United States.

As we know, most businesses will need to apply for some sort of working capital during their lifetime. Traditional loans are not always an option to many business owners due to the lengthy paperwork required and strict rules and guidelines, however, progress is being made when it comes to providing the LGBT community with business-funding options. For instance, the Small Business Administration (SBA) has set up a few different programs and outreach initiatives. Aside from the SBA and other traditional business loan options,

There are many alternative funding solutions that may be more suitable and easier for LGBT-owned businesses to obtain when it comes to growing their businesses. Here are a few options:

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 businesses credit card processing sales. These are usually only guaranteed by the future sales of your business.

Minority Business Loans: There are many options avaialable in this category and its not just catered to the LGBT community. We have put togher a full list of Minority Business Loan options available. Many of these are grants and offer zero interest funding programs.

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.

Excel Capital Management is a proud supporter of the LGBT community, and we are here to help with all of your business funding needs! For more information on Excel and the funding solutions we offer, APPLY NOW! For even faster service, contact one of our funding specialists TODAY at 877-880-8086.

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

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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.

Excel Capital Management’s Chad Otar Brings You Tips On Applying For Additional Working Capital

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Excel Capital Management’s Chad Otar Brings You Tips On Applying For Additional Working Capital

“Congratulations, your business has been funded!” These are the words all business owners love to hear. You know have the funds you need to open a new location, hire additional staff, purchase more inventory, or do virtually anything else to grow your business, but what happens when the funds are used up, your business is back on track, and you’re thinking you need more money?  At Excel Capital Management, we understand that each business owner and their respective companies are unique, and we take this very seriously. Our sales representatives and client retention team understands the importance of maintaining a long-term, friendly relationship. It’s our job to be there when your business initially applies for funding, and thereafter when  additional working capital may be needed. We pride ourselves on successfully funding businesses of all industry types – sometimes more than once, so here is some advice on applying for additional working capital for your business from our Co-Owner/Managing Partner, Chad Otar.

When Are Business Owners Typically Eligible For Additional Working Capital with Excel?

Chad Otar: At Excel, we like to notify our existing clients that they are eligible for additional funds  after they have paid off 50% of their current funding. By this time, the business owner should be able to obtain additional capital needed and manage it well.

 

When Is It The Right Time To Take Advantage of Additional Funds?

CO: Just because your business is eligible to receive additional capital after a prior funding doesn’t always mean it’s the best time. Business owners should have a plan for what they’d like to do with the new funds before applying. The capital should be used to a business owner’s advantage, and at the same time, the business owner should make sure their accounts are in good standing to be able to properly manage the money.

 

How Should Your Business Make Use of the Additional Capital Obtained?

CO: When working capital is used correctly, you should immediately see a turnaround! The original funds could be used to purchase inventory, hire new staff, train existing employees, open a new location, and more. This, in turn, should cause an increase in revenue, and there is no better time to use additional funds to increase the growth and allow even more cash flow. It is in good practice to use additional capital for anything necessary for the business – especially when business is booming! Maybe the second location you opened could use more advertising or staff. Maybe your employees need to be trained on how to use the new equipment you purchased. Additional working capital you obtain after your initial funding should be used to improve your business even further!

 

If Your Business Is Not Approved For Additional Funding, What Options Do You Have?

CO: Just because your business isn’t approved for additional funds at a specific point in time, our representatives like to maintain ongoing relationships with our clientele. We will work with you to understand why your business has been declined for additional funds, what steps to take to rectify the situation, and we will stay engaged to let you know when you are eligible.

 

Based on the above, do you think now is the right time to obtain more capital for your business? Excel Capital Management is here to help. Call one of our funding specialists today at 877-800-8086 to learn about what additional funds your business is eligible for!

3 Reasons Why Applications For Business Loan Get Declined

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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

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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

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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

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