Working capital financing options for small businesses

Working capital financing options for small businessesIntroduction

Large companies are always some options that they can expect to raise capital for their business. The’ve always have access to a number of alternatives such as the sale of stocks, bonds, bank loans and accounts receivable financing, among others. Looking at the other side of the coin, small business, people have between $ 20,000 and $ 500,000 annual income, which always has the challenge of trying to find the necessary capital to operate the business.

Lack of access to capital has prevented many small businesses grow and take advantage of the many opportunities available to them. It is not uncommon for small businesses to reject the offer and a great opportunity, because they have the capital needed to acquire the necessary resources to meet the bill. However, even small companies have big contracts, they find that they will not pay immediately after the delivery of services. Most of the provisions of the contract that the supplier must provide 30 to 60 days for customers to pay their bills – in effect, forcing suppliers to expand their credit. Lack of sufficient capital resources, including the requirement to offer commercial loans to customers, creating a “perfect storm” that prevents small businesses grow and difficult to exclude all avoid.A problem if the company has direct access to capital. Working capital of the company to add employees and resources to serve new customers and larger contracts. It also improves the ability of companies to spend 30-60 days payment terms to its customers.

In this paper we describe the most common sources of capital and provides an analysis of each source. Each resource can also set score, which summarizes the availability and flexibility of origin. The scoring system evaluates each source of capital given the quality of 1-10. Here are some features to consider when building points: the complexity of the accessibility of small businesses need the flexibility to pay higher scores indicate the source term capital (for example, if it requires significant financial information?) Positive vision of a small number of standard and available to the company. A lower score indicates that a particular source of capital may not be appropriate for the business.

Venture Capital Choice Financial least – Rating: books 1Many and tout the benefits of the availability of venture capital to invest in new operations or existing. Venture capital is an option for small businesses that have a current management team and a very aggressive growth plan, however, venture capitalists rarely invest in small companies that do not intend to go public. The purpose of the venture capitalists who invest in the company for a short time – say five years – and then withdraw funds from the company while gaining significant benefits from their investment. Investors – Rating: 2an angel investor is an individual or group of individuals usually invest in venture capital firms pre-rich. In other words, companies that do not meet the current needs of a venture capitalist, but who can meet your cash flow and management. However, should not be ruled out completely because angel investors angel investment group focused on the development of a specific community and invest in small businesses. The best way to find the nearest group of angel investors is to find on the Internet using a search engine such as Google (www.google.com). Banks – Rating: small business owners approach their 4.5Most first bank to try to get a line of credit or capital. However, unless the company has been operating for several years, has significant assets and all financial records are correct, your chances of getting at least some funds. The banks, however, can provide a credit facility to a private entrepreneur guarantee. This means that the business owner is personally responsible for the payment of debts. Credit Line can provide businesses with working capital requirements, but can be very risky, especially if the company does not produce the expected results and the owner does not pay the bank. Business owners should use this financing method is very good. Credit Cards – Rating: 5Much bank credit lines, many entrepreneurs use their credit cards to finance their business. Credit cards offer the ability to make purchases or obtain cash advances and pay for it later. Note that a credit card can be a very expensive source of funding. Although the majority of credit card interest rates are low enough to buy, the price could be as high as they were up 17% to 19% due to higher levels of crime. In addition, most credit cards charge 2% -4% of the nominal amount of the down payment as a “fee”. Such as bank lines of credit, personal guarantees of the business owners with credit card payment. Therefore, this method of financing can be very risky if the business does not produce the expected results and the business owner can not pay the credit card company. Business owners should use this financing method is very good. Home Equity Lines of Credit score: Owner 5.5Business owners also have the option to use the capital to fund the continued operation of your business. Loans and home equity lines of credit has many advantages, such as low interest rates and the possibility of having part of the tax cuts. This method of financing gained momentum between 2000 and 2004, when interest rates were at their lowest level in decades and the appreciation of real estate values. The main disadvantage of direct financing methods business owners at risk. In fact, the business goes – at home with opportunities for participation – business to succeed and be able to repay the loan. Such as lines of credit, employers must use this financing method is very good. Small Business Administration – Rating: 7.5The U.S. Small Business Administration (Www.sba.gov) offers a number of very practical choice to invest in commercial transactions. Although many of the services that are not covered in this document SBA, SBA offers the program “microcredit”. The purpose of this program is to encourage and provide micro loans of up to $ 30,000 for small businesses. These loans are usually offered by a financial institution or bank. They have a higher interest rate than traditional loans, but requires greater flexibility, making it more accessible to small business owners. Founders, friends and family – Rating: 7 Friends and family are one of the most traditional forms of small business financing. Many entrepreneurs can not use existing relationships and obtain funding, either as a loan or as a capital investment for your business. Although this source of funding may be more accessible to others, there are some inherent problems. First, employers run the risk of endangering the relationship if things do not go as expected and the business defaults. In addition, transactions are generally with little formality and without a written agreement, which further complicates the matter. If you choose to use this financing option, you should consult with an attorney and get some formal document that outlines the goals and responsibilities of each party. Receivables factoring Rating: 8Accounts factoring, also known as invoice factoring, has become an important source of capital for the company for decades. Now become mainstream and are available in medium and small. Factoring enables companies to sell their receivables to financial institutions defer payment of invoices paid within one or two days. After the sale, invoice finance companies waiting to pay. The main features of the power factor is credit factoring business customers “, as it is an important consideration. To date, receivables financing from the reach of small businesses. However, improvements in technology are turning to alternative methods of financing for small businesses. This means that a small business with little or no credit can experience strong customer, selling your invoices and get funding very quickly. Factoring should be considered as an option for companies that sell products or services to other businesses, rather than consumers.

Conclusion Having capital for your business is one of the most important decisions a business can make. As with all important decisions must be carefully planned and deliberately executed. The old adage that “the best time to find capital when you need it” remains true. You should take the time to explore all the options available to your business immediately, so you can be ready to “hit” a treasure of war when the time is right.

DISCLAIMERThis paper was written to provide small business owners with an overview of the financial options available to your business. However, this article is not intended to provide legal or financial advice since only a qualified professional can do. Commercial Capital LLC and the author is not liable arising from the use of this information on paper. Please consult with a professional before making important decisions about your personal or business finances.

Email Archiving and Continuity key requirement for Productivity

Email archiving is a way to provide solutions for email storage and make them easy to find and quick access. Archiving system works by automatically retrieving and storing the information contained in each email. Businesses need to do anything special at all file systems in place. Type of Email Management is important for a number of reasons:

Business owners have a duty to keep the email, not least because they may need in the future, you may need to email for legal reasons or to comply with certain laws such as health and safety. Email can be accepted as evidence in court and may be used by the human resources department.

The right email archiving will save businesses time and money. Having a system in place will free up the IT department, who may spend a lot of time doing back-up email every week. Also, look for an email can be a time consuming process if they are stored efficiently.

It has a good storage facility means that labor can be more productive. Take time email classification and decided to keep and which to store them is a task most businesses would prefer their staff will not do.

There are three main options when it comes to deciding on the kind of e-mail archiving for use:

In-house option, which requires the purchase and installation of storage hardware. This is an expensive option that requires a lot of space and operated by the IT team.

Storage is provided by the hosting service. Software installed automatically sends an email to an off-site storage facility where they are sorted and maintained. While this may cause some concern Email Security, as long as you use a reputable company that it could be a safer option than home storage. This is because these services (sometimes known as cloud-based email service) is protected by security software is widely available from more sophisticated markets.

A hybrid service that combines the two options, there are some that are stored in the hardware business and some kept off-site.

In addition, business owners need to consider how they would cope if their email system down for a long time. Email Continuity service to provide access to e-mail if you have an outage (or even planned) was not planned from the email system. It is easy to see how this is very important for any business email is an essential tool.

Opt for off-site email archiving to allow the company to have access to email even if the email service is not running.See also: new firms and productivity initiatives can benefit SMEs

For any business to grow, you know that email is kept safe and secure is very important. Having easy access to e-mails and know that even in the event of data loss they are still held in a secure area provide valuable peace of mind and increase productivity. No business can afford to ignore the benefits of email archiving and continuity.

Word of mouth marketing tool the most powerful

According to a study of more than 200 small and medium enterprises with SmallBusiness.co.uk, 36 percent of business owners said the level of mouth as the best work for their companies, on the other the specific marketing strategies.

Advertising (31 percent) were the next most popular choice, followed by social media (8 percent).

Sending direct mail (5 percent), cold calling (3 percent) and send email alerts (1 percent) are the most useful option, as well respondents.See:SMEs fail to foot-and- mouth aid

Chieu Cao, the founder Huddlebuy.co.uk deals website, said, “The successful small businesses to quickly learn about their customers and adapt their marketing activities accordingly. Many beginners have no choice but to rely on low-cost and creative way as the word of mouth and social media due to a limited budget. ‘

Matt Hutchinson, co-founder SpareRoom.co.uk flat and house share website, find that word of mouth is an important way of marketing. “Word of mouth is crucial to the success of your website. Today we made the ten leading UK website assets (data from Hitwise) We on the radar of people and, hopefully, by providing consistently excellent service we will continue to get recommendations from happy users . There is much more effective than any. ‘

Scott Knox, managing director of Agencies marketing agency Marketing Association trade adds that the business requires a clear strategy to go marketing plans. “Whatever business you decide to use the channel, it is a creative idea and a smart strategic thinking will eventually get the best cut through. Of course, the marketing channels will always play a significant role in bringing that message to life, but it is quite important for entrepreneurs and business leaders to not lose the creativity, regardless of industry colleagues you. ‘