More than just the initial investment or a lump sum for specific purposes, many small to medium sized businesses can benefit from extra working capital. But what if all your funds are tied up in equipment, designated for rent, or otherwise inaccessible? Especially in the early years of operation, this is a common problem that can keep businesses from reaching their full potential.
In the early years of business, a company’s greatest difficulty is sometimes access to working capital. Even a successful business may find that the initial costs for a business are too great to leave much room for growth, keeping them small for longer than their potential recommends. Without the good credit that only comes after some years in operation, extra financing can be nearly impossible to obtain.
Analysts will tell you that real estate had a hay day that has long since come and gone. Investors in-the-know disagree. They practice striking while the iron is hot. Right now, the iron is white-hot. Why? The housing market is improving, but it is still down. It’s the perfect time to invest in management and secure properties.
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The fact of the matter is lending is down. The reasons behind that fact prove far more interesting. Yes, it has to do with the state of the current economy, but only partially. The bigger road block to professional financing are the professionals themselves. This is a topic business owners don’t like to talk about. That being said, this article will broach the uncomfortable subject of how past mistakes affect future lending potential.
The Greener You are the Harder You Fall
You’ve secured the backing to open your doors, your business is creating buzz, and those revenue-gaining activities (RGA’s) can’t be far behind. All in all, the future looks bright. That is until it’s time to take things to the next level. (more…)
If the last few months have taught us anything, it’s that help comes in all shapes and sizes; just ask business owners who were affected by Hurricane Sandy. In other parts of the country, the post-hurricane devastation is old news. However, for business owners who face that reality every day, there’s nothing old about it.
People are still cleaning up, rebuilding, and scraping by. That’s not to say there aren’t glimmers of hope. In the aftermath of the hurricane, financial institutions have stepped up to help. The IRS has extended the tax deadline for storm victims and their families. Local banks are waiving mortgage payments and late fees for 90 days or more. Even the Small Business Association is lightening the load; over the last several months, their loan approvals surpassed the $1 billion mark.
When disaster strikes, we assess the damage it causes in different stages. Much like first responders, we initially focus on physical well-being. When physical wellness is restored, we move on to emotional triage. We begin dealing with feelings of loss, grief, anger, and depression. As we round the final corner, and begin pulling ourselves up by our bootstraps, another level of damage becomes our bedfellow: financial hardship.
As far as hurricanes go, Superstorm Sandy certainly knew how to make an entrance. She destroyed everything, including:
There’s not a structure or infrastructure that hasn’t felt the sting of her wake along the New York and New Jersey coastlines. The storm is single-handedly responsible for at least $50 billion in damages, and what many analysts are calling, the largest mass transit disaster in history.
Community businesses like Burch’s Hardware in Minneapolis, Minnesota stand as an example of the changing times. The store, which had been an Uptown staple for 80 years, has closed. It’s not the first victim of the recession, nor will it be the last. We’ve all seen the “store closing” or “going out of business” signs in the local windows. Some business owners are calling this economic downturn the final disappearing act for independent business.
The comparison is no surprise. Even in the lean months, employees have to be paid, overhead and in-store stock has to be maintained and covered, vendors accounts have to be settled. It’s all just part of the daily grind at your local hardware store. So what happens when the ends can no longer be met?
In the world of business financing, unsecured lines of credit are an adaptable reserve you can use to meet professional financial obligations. You are not required to back the loaned funds with any type of asset value. A pre-set annual fee is charged in place of collateral. This rate varies by credit provider. The annual fee is often waived the first year your account is active. These are just some of the basic terms. In order to make an informed decision when it comes to credit, you have to look at all the factors involved.
Nurturing Business, Cultivating Hope
