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ABOUT

Jeffrey Sweeney is an investment banker with years of experience in direct lending and corporate finance for small- to middle-market companies. He is the chairman and CEO of US Capital Partners, an innovator in small- to middle-market business lending. US Capital Partners has been providing prompt, innovative, and reliable financing solutions across the United States and abroad for more than a decade.

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Tuesday
Feb072017

US Capital Partners Provides Credit Facility Scalable to $15 Million for Alternative Lender

Alternative Lender

US Capital Partners Inc. has financed an early-stage alternative loan provider for small and medium-sized businesses.

SAN FRANCISCO, FEBRUARY 2017 – US Capital Partners Inc. has provided a financing line of credit scalable to $15 million for an alternative lender headquartered in the Southeastern United States. US Capital Partners is a private investment bank that makes direct debt investments, participates in debt facilities, and has wide distribution for debt and equity private placements for small and medium-sized businesses.

“We are extremely pleased to have provided this scalable financing line of credit for an expanding alternative loan provider for smaller businesses,” said Jeffrey Sweeney, Chairman and CEO at US Capital Partners. “The firm had been seeking a partner for some time, to help finance its own transactions and to expand its portfolio. US Capital Partners proposed various helpful finance strategies and then successfully provided the scalable credit facility this originator required to build its business further.”

About the Company

This Southeast-based early-stage alternative loan provider focuses on serving the finance needs of small and medium-sized businesses in the United States. Born out of the financial crisis, the company offers a personalized service focused more on the overall health of a business than on a business owner’s credit score. In 2016, the company originated over $100 million in business loans.

About US Capital Partners Inc.

Since 1998, US Capital Partners (www.uscapitalpartners.net) has been providing well-structured, custom finance solutions to private and public companies with up to $250 million in top-line sales revenue or project size. Headquartered in San Francisco, US Capital Partners is a private investment bank that makes direct debt and equity investments between $500,000 and $100 million, participates in debt facilities, and has very wide distribution for debt and equity private placements. The firm also offers financial advisory services for buy-side and sell-side engagements and for capital formation, including early-stage financings requiring equity or debt.

To learn more about how your business can secure the funding it needs, email Jeffrey Sweeney, Chairman and CEO, at jsweeney@uscapitalpartners.net or call (415) 889-1010.

Monday
Feb062017

What, Me Worry?

With a flurry of executive orders, President Trump’s policies have dominated the headline news and incited protests. Many investors have expected the angst in the political world to carry over negatively into the financial markets. So far, this has not happened in a significant way.

Lenders to less than investment-grade companies (those rated BB or below) want to be compensated for taking the higher risk of default. These loans are called “junk debt” or “high-yield” and have a higher rate of interest than does U.S. treasuries and investment-grade corporate loans. How much more interest high-yield debt pays is based on the lenders’ perception of risk.

The interest rate spread between U.S. treasuries and high-yield loans is one way to measure the debt market’s view of risk. When spreads are rising, perceived risk is rising. When spreads are falling, perceived risk if falling.

The current spread between U.S. treasuries and high-yield loans is about 4% (measured by the BofA Merrill Lynch US High-Yield Options-Adjusted Spread). The chart below shows that when the spread rises (indicated in red boxes), the stock market tends to decline and when the spread tightens, the stock market usually appreciates.

Since the February 11, 2016 peak, spreads have fallen from about 9% to about 4%. On a year-over-year basis, spreads have declined from about 7.7%.

What, me worry? The high-yield debt market is showing essentially no rising concern over recent Trump actions.

Tying It All Together

The stock market itself is a powerful indicator. If stocks are rising, at a fundamental level it implies investors believe future earnings are growing and/or the environment is becoming less risky. The formula for stock values looks like this:

Relative to expectations about future earnings and the risk premium, the risk-free interest rate plays a minor role in determining stock values as it changes more slowly and is a small absolute number.

In the next chart, we show the values of each of the inputs in the stock value formula on a year-over-year basis. Bullish inputs are shown in green and bearish inputs are marked in red. We measure earnings with S&P 500 quarterly operating earnings. We use the high-yield spread as a proxy for the risk premium. When we look at what is happening with the rise in earnings and the decline in the risk premium, it is no wonder stocks have appreciated over the past year.

With high-yield spreads “tight” and earnings coming in above expectations, we see a continuation of bullish stock market trends in the intermediate term.

We invite you to call or email anytime if you have questions about our wealth management solutions. Please give us a call at (415) 249-6337 or email us at info@uscapitalwm.com to learn more.


Stock Market Dashboard



US Capital Wealth Management is your investment solutions partner.

Listed below are some of the investment strategies we offer.
We are eager to speak with investors and investment advisors looking for a new trusted partner.
Please give us a call at 415-249-6337 if you would like to talk.








This commentary and previous editions are available as PDFs:

2/3/2017: What, Me Worry
1/27/2017: Extraordinary Earnings Louder Than Trump
1/20/2017: It's Not All About Trump
1/13/2017: I Gotta Feeling
1/6/2017: Finally, A Case for International in Your Portfolio
12/30/2016: Predicting the Future -2017
12/23/2016: Bullish New Year
12/16/2016: All I Want For Christmas is Financial Independence
12/9/2016: Debt Trap
12/2/2016:
Trade What Is, Not What You Think It Should Be – 2017 Outlook

US Capital Partners

Pursuant to the provisions of Rule 206(4)-1 of the Investment Advisors Act of 1940, we advise all readers to recognize that they should not assume that recommendations made in the future will be profitable or will equal the performance of past recommendations. This publication is not a solicitation to buy or offer to sell any of the securities listed or reviewed herein. The contents of this letter have been compiled from original and published sources believed to be reliable, but are not guaranteed as to accuracy or completeness. Nicholas Atkeson and Andrew Houghton are also principals of US Capital Wealth Management, a registered investment advisor. Clients of US Capital Wealth Management and individuals associated with US Capital Wealth Management may have positions in and may from time to time make purchases or sales of securities mentioned herein.

THIS NEWSLETTER IS PROTECTED BY COPYRIGHT LAW. UNAUTHORIZED DISTRIBUTION AND/OR REPRODUCTION BY PHOTOCOPY OR ANY OTHER MEANS IS STRICTLY PROHIBITED AND PUNISHABLE BY A FINE OF UP TO $25,000.

Wednesday
Feb012017

US Capital Partners Will Present at the 25th Annual European Pensions Symposium in Munich, Germany

European Pensions Symposium 2017

Chairman and CEO of US Capital Partners Inc. offers Europe’s leading institutional investors strategies and best practices for achieving higher returns in exchange for a little less liquidity, not increased risk.

SAN FRANCISCO, JANUARY 2017 – US Capital Partners Inc. will be presenting at the 25th Annual European Pensions Symposium at Hotel Vier Jahreszeiten Kempinski in Munich, Germany on February 1–3, 2017. The European Pensions Symposium is an exclusive invitation-only event, attracting over 95 senior investment officials from Europe’s leading pension funds and insurers each year.

US Capital Partners is a private investment bank headquartered in San Francisco. Through its affiliated broker dealer, US Capital Global Securities, LLC, the firm facilitates equity private placements, makes direct debt investments and participates in debt facilities, and has a wide distribution for these services and financial products for small and medium-sized businesses.

Jeffrey Sweeney, Chairman and CEO at US Capital Partners, said: “I look forward to sharing our unique investment perspective on ‘investment-grade’ credit alternatives with leading institutional investors at this important event in Munich. In the current economic landscape of long-term low returns, negative interest rates, and increased market volatility, focusing on best practices in credit alternatives has the potential to deliver higher returns in exchange for a little less liquidity, not increased risk.”

Running over three days in Munich, the European Pensions Symposium brings together Europe’s largest and most sophisticated pension funds, foundations, and insurance companies to consider key issues and themes for the year ahead and to explore new investment opportunities.

About US Capital Partners Inc.

Since 1998, US Capital Partners has been providing well-structured, custom financing solutions to private and public companies in the United States and abroad. Headquartered in San Francisco, US Capital Partners, operating with its affiliate US Capital Global Securities, LLC, is a full-service private investment bank with a wide distribution for debt and equity private placements. The group makes debt investments between $500,000 and $100 million, participates in debt facilities, and offers asset management, financial advisory services for buy-side and sell-side engagements, and capital formation, including early-stage financings requiring equity or debt.

Friday
Jan272017

Extraordinary Earnings Louder Than Trump

When companies report earnings, they adhere to Generally Accepted Accounting Principles (GAAP).  Stock market analysts make adjustments to GAAP earnings to exclude “extraordinary items.”  The analysts are trying to uncover the fundamental earnings trends by making these adjustments.  Adjusted earnings are called “operating earnings.”
 
When we look at operating earnings rather than GAAP earnings, we see some extraordinary things.  For instance, operating earnings expectations for the fourth quarter 2016 are for a year-over-year increase of 32%, a rate not seen since late-2010 when earnings were rebounding in the wake of the financial crisis.

 

After seven consecutive down year-over-year quarters lasting from the fourth quarter 2014 through the second quarter 2016, earnings are reaccelerating.

 

The seven negative growth quarters of operating earnings helps explain why the S&P 500 was roughly 2085 in December of 2014 and was still at this level on November 4, 2016. 
 
The green arrow on the graph above shows that we are just now reaching the point when we should expect to see record S&P 500 operating earnings achieved in all four quarters of 2017.  Analysts are forecasting a 22% increase in operating earnings year-over-year and a 36% rise over the next two calendar years from 2016 levels.
 
So far during this earnings season with over ten percent of all companies having reported, 67% of the companies that have already reported have posted better than expected earnings numbers.

Of the 30 stocks in the Dow Jones Industrial Average, 18 reported earnings through the close yesterday with nearly 80% exceeding earnings estimates.  The average beat rate of the 18 companies is nearly 6%.
 
We are early in the earnings reporting period but it appears the high S&P 500 earnings growth outlook may be transitioning from forecast to reality as the numbers are generally coming in better than expected.
 
Since just before the presidential election on November 4 2016, the S&P 500 is up about 10%.  If the 22% increase in operating earnings translates directly into a 22% potential increase in the value of the S&P 500, the target valuation of the S&P 500 during 2017 would be roughly 2,540 or another 10% higher.
 
This week, the Leading Economic Index (LEI) was updated.  For December, the LEI increased by 0.5% and the November report was revised higher to 0.1% from 0.0%.  The six-month moving average change in the LEI is now 0.2%.  The LEI is showing no signs of intermediate-term recession risk.
 
With no recession in sight and a potential 10% additional rise in stock market values by year end, the risk/reward balance remains attractive for U.S. stock investors.  Give us a call if you would like to discuss how best to invest in 2017.
 
We invite you to call or email anytime if you have questions about our wealth management solutions.  Please give us a call at (415) 249-6337 or email us at info@uscapitalwm.com  to learn more.


Stock Market Dashboard



US Capital Wealth Management is your investment solutions partner. 

Listed below are some of the investment strategies we offer. 
We are eager to speak with investors and investment advisors looking for a new trusted partner.
Please give us a call at 415-249-6337 if you would like to talk.

  

  



 


This commentary and previous editions are available as PDFs:

1/27/2017: Extraordinary Earnings Louder Than Trump
1/20/2017: It's Not All About Trump
1/13/2017: I Gotta Feeling
1/6/2017: Finally, A Case for International in Your Portfolio
12/30/2016: Predicting the Future -2017
12/23/2016: Bullish New Year
12/16/2016: All I Want For Christmas is Financial Independence
12/9/2016: Debt Trap
12/2/2016: 
Trade What Is, Not What You Think It Should Be – 2017 Outlook
 

US Capital Partners

Pursuant to the provisions of Rule 206(4)-1 of the Investment Advisors Act of 1940, we advise all readers to recognize that they should not assume that recommendations made in the future will be profitable or will equal the performance of past recommendations. This publication is not a solicitation to buy or offer to sell any of the securities listed or reviewed herein. The contents of this letter have been compiled from original and published sources believed to be reliable, but are not guaranteed as to accuracy or completeness. Nicholas Atkeson and Andrew Houghton are also principals of US Capital Wealth Management, a registered investment advisor. Clients of US Capital Wealth Management and individuals associated with US Capital Wealth Management may have positions in and may from time to time make purchases or sales of securities mentioned herein.

THIS NEWSLETTER IS PROTECTED BY COPYRIGHT LAW. UNAUTHORIZED DISTRIBUTION AND/OR REPRODUCTION BY PHOTOCOPY OR ANY OTHER MEANS IS STRICTLY PROHIBITED AND PUNISHABLE BY A FINE OF UP TO $25,000.

Friday
Jan272017

US Capital Engaged on $6M Equity Investment for Maven Research, Inc.

Click Tombstone Below for Offering Details

Maven

San Francisco-based private investment bank backs innovative provider of cloud-based micro-consulting platform, with growing network of qualified domain experts.

SAN FRANCISCO, JANUARY 2017 – US Capital Partners Inc. has been engaged by Maven Research, Inc. (“Maven”) as its strategic advisor in capital formation needs. Maven will use the new financing for sales and marketing, research and software development, customer acquisition, and general working capital as the business continues to expand.

US Capital Partners Inc. is a private investment bank headquartered in San Francisco. Through its affiliate broker dealer, US Capital Global Securities, LLC, the firm facilitates equity private placements, makes direct debt investments, participates in debt facilities, and has a wide distribution for these services and financial products for small and medium-sized businesses.

“We are delighted to be assisting Maven with its growth capital needs in a strategic investment banking role, as the company moves into the next phase of its business expansion.” said Jeffrey Sweeney, Chairman and CEO at US Capital Partners. “The opportunity to participate in Maven’s $6 million preferred equity raise is now open to eligible investors through our digital investment platform, available at www.uscgs.com, which offers a curated selection of private placement opportunities.”

About Maven Research, Inc.

Founded in 2008, Maven Research, Inc. is a privately owned company that offers a cloud-based enterprise software-as-a-service platform that empowers Fortune 500 companies to build, control, and manage private knowledge communities and to access a broad base of external providers of professional expertise. Maven’s customer base consists primarily of well-known international manufacturers, industrial companies, conglomerates, and pharmaceutical enterprises. For more information, visit http://bit.ly/2jZPD1p.

About US Capital Partners Inc.

Since 1998, US Capital Partners has been providing well-structured, custom finance solutions to private and public companies in the United States and abroad. Headquartered in San Francisco, US Capital Partners, operating with its affiliate US Capital Global Securities, LLC, is a full-service private investment bank with a wide distribution for debt and equity private placements. The group makes debt investments between $500,000 and $100 million, participates in debt facilities, and offers asset management, financial advisory services for buy-side and sell-side engagements, and capital formation, including early-stage financings requiring equity or debt. For more information, visit www.uscapitalpartners.net.

To learn more about how your business can secure the funding it needs, email Jeffrey Sweeney, Chairman and CEO, at jsweeney@uscapitalpartners.net or call (415) 889-1010.

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