Every new business hopes to join the ranks of those famous unicorns that turn profitable right out of the gate. Sadly, most startups fail to meet this goal. Even worse, the best concepts often struggle or even fail within the first few years. According to research cited by SCORE, almost all budding companies wrestle with cash flow problems — and problems with cash flow management represent the almost universal plague that leads to new business stumbles and even failures. These startups may have succeeded at bringing ideas to market and even attracting customers; however, 82 percent of failed new businesses just did not have enough funding to grow or, in many cases, keep operating. And for just these kinds of startups, invoice factoring could provide a solution to improve cash flow in ways that would lead to thriving, growing young companies. Yes, startups should consider invoice factoring as a new business financing option. Find out how invoice factoring will significantly improve cash flow, how it works, and if it’s the right solution for all startups. How Invoice Factoring Empowers StartupsThe most basic kind of invoice factoring refers to selling accounts receivable to a third party. In other words, startups can convert their unpaid invoices into immediate working capital. New businesses won’t have to wait days, weeks, or even months for their customers to pay invoices. In turn, they can use this money to service more customers, develop new products and services, pay operating expenses, expand marketing, or in whatever way best suits their goals. Some highlights of the benefits of invoice factoring for new businesses include:
How Does Invoice Factoring Work for New Businesses?Capstone offers flexible factoring options while eliminating hassles. That means startups can start enjoying the benefits of better cash flow and improved efficiency right away. This list explains all the steps involved in invoice factoring a common, flexible solution for startup businesses:
What are the Best Businesses for Invoice Factoring?In general, invoice factoring can provide the best solution for companies doing business with creditworthy customers but have delays in cash flow because of a time gap between invoicing for goods or services rendered and getting paid. Other typical characteristics include:
How to Find the Best Financing Solution for a New BusinessCapstone provides essential funding requirements to emerging and growth companies. Take a moment to learn more about Capstone’s flexible options for new business invoice factoring. Invoice factoring helps new and established businesses manage cash flow and work more efficiently. New companies can discuss their needs and concerns with a Capstone representative to choose the best financing option for their unique situation. Contact Capstone by email or phone to tell them more about your business needs and goals, so they can help you choose the perfect option. The post Is Invoice Factoring a option when starting a company? appeared first on Capstone Capital Group. via Tumblr Is Invoice Factoring a option when starting a company?
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In its basic form, a Letter of Credit (or LC) is a document produced by a financial institution delivered to another financial institution that guarantees an Importer’s payment to an Exporter will be received on time and for the correct amount. The Importer is required to send payment to the issuing institution who then transfers funds to the Exporter’s advising institution or directly to the Exporter. In the end, the Exporter will receive payment as long as the transportation of the goods is compliant with the LC’s terms and conditions. Letters of Credit are most often used between Banks that are in different countries for international trade. Trade FinanceTrade Finance assists with trade cycle funding gaps and allows businesses to obtain goods from a Supplier with cash upfront. When a Supplier abroad is exporting goods to a business partner elsewhere, they will want assurance that payment will be received in a timely fashion. Instead of the business owner paying for goods right away, the institution handling their import financing will instead produce a Letter of Credit that will be presented to the Supplier or their finance company. As previously mentioned, the Letter of Credit serves as a guarantee of payment when the conditions of the initial Supplier agreement are met. Upon receipt of goods, payment is made to the Supplier or their finance company. This arrangement can be used for a one-time purchase of supplies or continuingly if there will be a lasting business relationship between the Importer and the Exporter. Reasons to Use an LC with Trade FinanceThere are a few key reasons why an LC should be used with Trade Finance.
Trade Finance Steps
Overview of StepsIn summary, an overview of the steps are as follows:
Need funding for trade? Capstone is here to help: Let us work with you today to help you find the best solution to your cash needs without taking on more debt. Whether you are facing an immediate one-time need for cash to secure a contract, or you require a long-term solution to cash flow, contact our skilled team of representatives today and let us work with you to find the best options for your funding needs.
The post Letters of Credit in Trade Finance appeared first on Capstone Capital Group. via Tumblr Letters of Credit in Trade Finance One of the consequences of COVID-19 is the negative impact on the credit of small and mid-sized business entities. Lending institutions are generally risk-averse and the pandemic has only further pushed them to implement more stringent underwriting standards focused on the creditworthiness of borrowers. This creates a problem as more and more businesses do not qualify for a traditional line of credit. Since many businesses were forced to completely — or partially — close down from early 2020, with some even closed or operating at significantly limited capacity well into 2021, business owners are now grappling with the effects that limited income and slower cash flow have had on their credit. In fact, according to McKinsey Insights, lenders will be forced to take a deeper look at credit criteria moving forward. One statement stands as a stark reminder of this crisis on the finances of businesses “From the perspective of financial institutions, the conditions that the COVID-19 crisis triggered have specific implications for managing and mitigating credit risk.” Securing Financing Amid Pandemic ConcernsThousands of small business owners were eligible for, and received, Paycheck Protection Program (PPP) funding to help them through the pandemic. For most, however, this capital only helped them maintain operations for a short period of time. Many business owners would never have believed that one year into the pandemic they would still be operating at limited capacity and still uncertain about a return to full operations. While vaccines and other mitigation factors have lessened the overall human impact of the pandemic, the long-term financial impact on businesses is still largely unknown. Some businesses are faced with declining credit ratings meaning they could face steeper than normal challenges securing funding. Alternative Funding SolutionsA better alternative for businesses is to use their accounts receivable to gain access to capital. Invoice factoring is able to provide immediate working capital and liquidity. Funding is not dependent on the creditworthiness of your business. Instead, the creditworthiness of your customers provides the basis for determining whether you can factor your invoices. Typically, businesses are forced to wait 30, 60, or even 90 days before they are paid for the products or services they provide. Factoring turns those invoices into cash — nearly immediate cash. This allows business owners to have the necessary cash on hand to sustain operations and meet obligations to their customers, while not depending on the financial institution for a line of credit. Some of the advantages of invoice factoring include:
Qualifying for funding is relatively easy. The key requirement is to have invoices that are payable by dependable and creditworthy customers. Whether you need immediate capital, or you need regular access to cash, invoice factoring can help you meet your financial obligations. Customized Solutions Work BestThis is one reason more businesses are turning to Capstone Capital Group. Regardless of what your business credit situation is, your financing needs are not the same as every other small business. We do not try to take a one-size-fits-all approach to capital since every business operates differently and has different cash demands. We take the time to understand your business model, your goals, and your overall financial situation. We then work on a customized solution that suits your financing needs. We understand the importance of cash flow to the long-term success of your business and we are committed to providing solutions to help you succeed. Capstone is here to help: Let us work with you today to help you find the best solution to your cash needs without taking on more debt. Whether you are facing an immediate one-time need for cash to secure a contract, or you are in need of a long-term solution to cash flow, contact our skilled team of representatives today and let us work with you to find the best options for your funding needs. The post Getting a Small Business Loan with Bad Credit in 2021 appeared first on Capstone Capital Group. via Tumblr Getting a Small Business Loan with Bad Credit in 2021 Losing funding is devastating to a business at any time, but the ongoing crisis created by the COVID-19 pandemic has shaken up banking on a massive scale which makes keeping your business functioning financially even more difficult. We already know government programs like the Payroll Protection Program (PPP) were given out on a first-come, first-served basis and many small businesses were left out in the cold. Even with subsequent rounds of funding, many businesses were unable to qualify for various reasons including, in some cases, their banking relationships. Other businesses were faced with being notified by their financial institutions that lines of credit were being suspended, small business owners who were depending on their home equity to take a line of credit were found those lines were suspended, and still, others learned banks were not accepting new applications for loans. Where does this leave business owners who need capital to maintain their current business operation or to expand their operation? Why Financials Institutions Are Decreasing Their Lending AvailabilityThe COVID-19 pandemic has financial institutions making changes in how they do business. One of the more prevalent trends we may see are financial institutions taking measures to counteract increased risk with their lending practices. There are specific reasons behind this change including:
These factors and others impacting financial institutions mean business owners need contingency plans to access the capital they need. Business owners also need to be prepared for potentially losing an existing line of credit when they need it most. While this is important DURING the pandemic, the same could be true for any time your funding lines are interrupted. Finding an Alternative Funding Source for Long-Term SuccessGiven these challenges, more businesses are finding they fall outside the acceptable risk threshold to access and retain lines of credit as well as more traditional business funding. When faced with financial demands or an opportunity to expand operations, some business owners may feel pressured to reach out to private investors and offer a piece of equity in their company. There are other options businesses can consider including working with vendors to extend credit terms, taking out a personal loan, or invoice factoring. Each has the potential to provide you the capital you need on relatively short notice. Joseph Ingrassia, the Managing Member for Capstone Capital Group, LLC, provides insight and points of consideration for each in a recent Forbes Expert Panel article on Funding Your Business with a Personal Loan? 14 Things to Consider First and also in Emergency Business Funding: A Look at Your Options. Business owners should avoid taking steps that could damage them financially. For example, these include hard money lenders, credit card advances, and merchant cash advances (MCAs). These options may be available to you but in the long-run, they could harm your business financially as they typically come with high-interest rates and will create a never-ending cycle of debt. Converting accounts receivable to immediate cash through invoice factoring makes sense from a practical point of view. Here are some of the reasons why this option is a good one:
While banks may prefer to lend to businesses with only positive financial performance, stable cash flows, and predictable revenues, factor companies, such as Capstone, can often work beyond these issues and provide funding based on the quality and strength of a business owner’s accounts receivable. Also, businesses often turn to invoice factoring for their cash flow needs as the approval process is simpler and faster than the underwriting process at a bank. That means businesses have quicker access to crucial working capital. This is one option, among others that we can help establish to help your business meet your financing needs. Capstone continues to be a leader in developing customized plans for businesses in a wide range of industries to help them meet their capital needs. Whether you are currently facing uncertainty in your funding, or you want to have a plan in place which eliminates the need to take on new debt from your bank, contact Capstone by email at [email protected] or call us at (212) 755-3636. Let us help design a customized financing package that works for your business. The post What To Do When You Lose Funding Amid a Pandemic appeared first on Capstone Capital Group. via Tumblr What To Do When You Lose Funding Amid a Pandemic We have been facing an unprecedented time during 2020 with COVID-19 ravaging our communities. Governors across the United States have taken steps, which we once never imagined including ordering business owners to close their doors. This massive closedown was in response to states losing lives, hospitals filling up, and the virus spreading at rates one could only be shocked at hearing about. Unfortunately, while there have been massive strides in combating the virus including some therapeutics and the recent announcement of an emergency use authorization for a vaccine, we still have a long way to go before our businesses get back to “normal” operations. During this time, we have heard about more businesses than ever before filing for bankruptcy protection, and if the prognostications are accurate, we can expect more. Borrowing is Driving Business BankruptciesEnergy companies, travel and tourism businesses, and retail businesses which were on the edge were toppled during the early months of the pandemic. There were very few industries which were not impacted by lack of sales, inability to continue operating with fewer people being allowed to congregate indoors, and naturally, fewer people traveling for business or pleasure. According to Bloomberg News, thousands of businesses filed for bankruptcy protection, while thousands more shuttered their doors for good. However, this may not capture the full impact of the COVID-19 pandemic on bankruptcy filings for business. The International Monetary Fund (IMF) has indicated they anticipate seeing the trend of business bankruptcies to continue ticking up over the next several months, and perhaps well into the third quarter of 2021. In large part, they believe this trend will be driven largely by debt, and not as a result of any restrictions which are placed on businesses, though there are currently significant restrictions in place, and more may be headed our way. The IMF believes this trend is a result of businesses who were forced to borrow money to see their way through the initial lockdowns. However, for many of these businesses, getting the doors open is only part of the problem. Customer confidence walking through the doors of a retail outlet means depressed sales. Lack of confidence in being safe from the virus will continue to ravage many businesses including, and perhaps most notable, the hospitality industry. Some of the sectors which have seen notable bankruptcies recently include:
Red Flags for Getting Back to BusinessSlower holiday sales are anticipated this year for a number of reasons. Currently, many states are actively encouraging people to not open up their homes to people outside, even family members to help stop the spread of COVID-19. Additionally, many are uncertain about how long they will have to wait before they return to full employment, or whether they will have a job come January of 2021. Uncertainty at how much government assistance is available, and other factors will likely continue to slow consumer spending. Black Friday sales and other holiday sales often serve as a warning signal for the economy. In-store sales dropped an unheard-of 52 percent while online sales increased 22 percent. This may indicate more consumers started shopping earlier or may be saving money and buying less. If this holds true, we could see unprecedented business closures post-holiday season as businesses begin to evaluate their financial outlook for 2021 and make decisions about where their focus should be. Getting Back to Business in 2021Reopening the doors and being ready to meet the challenges of 2021 may only be the tip of the iceberg. Unemployment numbers, which tapered off from the high level of 14.7 percent in April of 2020 currently sits at about 6.7 percent, an amazing improvement. However, many of these numbers can be deceptive because some of the people currently unemployed may not have jobs to go back to because their businesses no longer exist. In some industries, there have been complaints from employees because they have been told that should the company reopen, they will have to reapply for their jobs versus being guaranteed a job. This is a recipe for disaster for businesses and for individuals. Keep in mind, these numbers also do not reflect employees who may currently be “furloughed” versus laid off. For those businesses who are facing COVID-19 slowdowns, dealing with reopening, and still facing an uncertain future, going into debt could exacerbate any issues they were facing before the pandemic. One problem many businesses have faced, cash flow issues, will likely continue into early to mid-2021 whether restrictions on opening hours and capacity are lifted. Demand over the holiday season will help some businesses, but only if they can take advantage of the demand for delivery of services direct to consumer, or direct to businesses who are dealing directly with consumers. For those business owners, the need for ready access to capital to fund materials purchases will be the key to keeping their doors opening and avoiding the need to consider bankruptcy or exchanging equity in their company in return for capital to fund growth. Financing New Growth and Demand Needs for 2021Unfortunately, one other side effect of the pandemic is while interest rates have remained low, the credit markets still offer little relief for small and mid-sized business owners. Even with low rates, small business lending continues to be a challenge with fewer small business loans being granted. During the second quarter of 2020, small and mid-sized business lending decreased, when in reality, it was probably needed more than ever. To avoid needing to seek protection under the bankruptcy code, many small and mid-sized businesses, particularly those which are in already underserved markets such as entertainment, staffing, and contractors will need customized solutions to their cash flow problems. At Capstone, we offer that flexibility. We can help your small to mid-sized business find a financing solution that helps you bridge the cash flow gap between now and the vaccine being more widely distributed allowing businesses to return to normal operations. Contact us today and let us help you find a solution that works for your business so you have the capital you need to survive through these uncertain economic times. The post COVID-19 Fallout: Bankruptcy Filings Increasing Post Pandemic appeared first on Capstone Capital Group. via Tumblr COVID-19 Fallout: Bankruptcy Filings Increasing Post Pandemic Every business in the United States faced some form of setback during the COVID-19 forcing shutdowns and slowdowns. In response, millions of business owners were forced to seek out additional sources of capital. Fortunately, the Paycheck Protection Program (PPP) was available to millions of small businesses. The Paycheck Protection Program launched with some confusion about how to apply, what the criteria was, and how the loans would eventually be forgiven. For this reason, many business owners are still uncertain about the process necessary to turn these loans into grants. For those who took out loans under the PPP including those in construction, manufacturing, wholesale and retail trade, and transportation and warehousing now have to be ready for their next big challenge — applying for loan forgiveness. Some who were able to successfully borrow money under this program, there were also several changes meant to make it easier for businesses to use the program. This also meant that those businesses who obtained funds during the initial funding windows may not be aware of what steps they have to take to ensure their loans are “turned” into grants instead. The 24-week period for applying for the forgiveness of the loans is quickly approaching for most businesses. To help business owners — including tribal businesses, those who were self-employed, independent contractors, nonprofits which met specific criteria and more — navigate the unprecedented challenges you are facing, download our white paper, Payment Protection Program: Loans Forgiveness which will help guide you through the process to make sure you are fully prepared for the future. The post Available for Immediate Download: Payment Protection Program Loan Forgiveness Guide appeared first on Capstone Capital Group. via Blogger Available for Immediate Download: Payment Protection Program Loan Forgiveness Guide Every business in the United States faced some form of setback during the COVID-19 forcing shutdowns and slowdowns. In response, millions of business owners were forced to seek out additional sources of capital. Fortunately, the Paycheck Protection Program (PPP) was available to millions of small businesses. The Paycheck Protection Program launched with some confusion about how to apply, what the criteria was, and how the loans would eventually be forgiven. For this reason, many business owners are still uncertain about the process necessary to turn these loans into grants. For those who took out loans under the PPP including those in construction, manufacturing, wholesale and retail trade, and transportation and warehousing now have to be ready for their next big challenge — applying for loan forgiveness. Some who were able to successfully borrow money under this program, there were also several changes meant to make it easier for businesses to use the program. This also meant that those businesses who obtained funds during the initial funding windows may not be aware of what steps they have to take to ensure their loans are “turned” into grants instead. The 24-week period for applying for the forgiveness of the loans is quickly approaching for most businesses. To help business owners — including tribal businesses, those who were self-employed, independent contractors, nonprofits which met specific criteria and more — navigate the unprecedented challenges you are facing, download our white paper, Payment Protection Program: Loans Forgiveness which will help guide you through the process to make sure you are fully prepared for the future. The post Available for Immediate Download: Payment Protection Program Loan Forgiveness Guide appeared first on Capstone Capital Group. via Tumblr Available for Immediate Download: Payment Protection Program Loan Forgiveness Guide Available For Immediate Download: Restarting Your Business After COVID-19 Mandatory Shutdown9/18/2020 The last thing you need is to have your business collapse after working tirelessly during these lockdowns to stay prepared. Now that you are ready to reopen, you want to make sure you are prepared for any challenges that may come your way. Capstone Capital Group, LLC wants to help you make sure your planning is flawless, which is why we are offering this free guide to help you get back to business on a sound financial footing. This guide provides you with the tools to:
All of this is meant to guide your business and your customers through the challenges of restarting your business in this post-COVID world. Download this free guide now and get access to our limited monthly newsletter to which thousands of professionals rely on for an in-depth monthly analysis of the state of the North American Business Finance Industry. The post Available For Immediate Download: Restarting Your Business After COVID-19 Mandatory Shutdown appeared first on Capstone Capital Group. via Blogger Available For Immediate Download: Restarting Your Business After COVID-19 Mandatory Shutdown Available For Immediate Download: Restarting Your Business After COVID-19 Mandatory Shutdown9/18/2020 The last thing you need is to have your business collapse after working tirelessly during these lockdowns to stay prepared. Now that you are ready to reopen, you want to make sure you are prepared for any challenges that may come your way. Capstone Capital Group, LLC wants to help you make sure your planning is flawless, which is why we are offering this free guide to help you get back to business on a sound financial footing. This guide provides you with the tools to:
All of this is meant to guide your business and your customers through the challenges of restarting your business in this post-COVID world. Download this free guide now and get access to our limited monthly newsletter to which thousands of professionals rely on for an in-depth monthly analysis of the state of the North American Business Finance Industry. The post Available For Immediate Download: Restarting Your Business After COVID-19 Mandatory Shutdown appeared first on Capstone Capital Group. via Tumblr Available For Immediate Download: Restarting Your Business After COVID-19 Mandatory Shutdown Minority-owned businesses may have the ability to bid on contracts which other businesses may not have. In large part, this is because of the Minority Business Development Agency which encourages states, and municipalities to hire minority businesses to complete projects on their behalf. However, as a minority-owned business, you still need the financial capacity to allow you to make these bids. Minority Businesses and Banking ChallengesWhen you know you will be bidding on a contract, the first thing you do is ensure you have the staffing and materials you will need to complete the terms of the contract. Should a review show you will need additional staffing and supplies, you may then be forced to seek out capital to ensure you can successfully complete the contract should you win the bid. This is the time when small and mid-sized business owners often turn to their banking relationships. However, a recent article in the New York Times shows that minority business owners often face many hurdles when dealing with banks. In fact, minority businesses often find it impossible to develop long-term banking relationships. This leaves many facing unusual challenges when bidding on contracts, even when those contracts mean a stronger business. When a minority business is bidding on contracts, especially a government contract, there are numerous hurdles to overcome including showing how you are going to fulfill the terms of the contract. Many businesses are asked to provide guarantees, which often are not available for minority businesses. Therefore, working with a company like Capstone has many advantages whether you are bidding on a contract, or you have recently been awarded a contract. Discover the Capstone DifferenceAt Capstone, we have a process that allows us to work with both internal processes and outside private partners to help you gain access to much-needed capital. When you have landed a minority contract, we understand it could be 90 to 120 days or more before you see payment for an invoice you have issued. This is why we will help you customize a plan which works best for your company. These plans may include:
Finding the Right Balance for Your BusinessCapstone believes in relationship building. We know each business has different needs for cash flow. We also understand some business owners require capital to maintain their obligations, while others have sufficient cash to meet those obligations but wish to have access to additional sources of capital in order to invest in the growth of their business. This is why we take the time to understand several things before we develop a plan that suits your business. Some of our discussions will include:
Once we have discussed these matters with you, we will develop a comprehensive financing plan that is designed to help you meet your goals and grow your business. Not only can we help you meet your cash flow finances, in many cases, we can include long and short term financing options which will help you make long-term plans to ensure you are able to meet the goals you set for yourself and your business. Whether you are considering bidding on a new contract, or you have been awarded a minority contract and now need the capital to fulfill the terms of your contact, contact Capstone today at (212) 755-3636 and see what a difference having a strong relationship with a financing partner can make in your business. The post Prepare to Put Minority Contract Opportunities to Work for Your Business appeared first on Capstone Capital Group. via Blogger Prepare to Put Minority Contract Opportunities to Work for Your Business |
Capstone Capital Group, LLC
Capstone seeks to fund under-capitalized, competent businesses to sustain sales growth, preserve capital and ensure business goals are realized. |