Search

Featured Small Business Lending Article

Small Business Lending
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.

Subscribe to Blog
Navigation
Tuesday
Feb232010

Small Business Financing News: What You Need to Do if Your Bank is One of the 700 on the FDIC's Troubled List

Big news hit today as the FDIC's "problem bank list" reportedly jumped to 702 institutions in the fourth quarter, up from 552 in the third quarter.

According to Dan Burrows' article More Than 700 Banks Are on FDIC's 'Troubled' List:

Another 45 institutions failed during the fourth quarter, bringing the total number of bank failures for 2009 to 140, the highest annual total since 1992, the FDIC said. The agency insures deposits at more than 8,012 institutions with in excess of $13 trillion in assets.

If your bank is on the FDIC's list, you need to be proactive, not re-active about protecting your small business financing.

I recently blogged about what you need to do if you need recapitalization and how finding the right advisor or small business investment banker is key if you want to continue to secure working capital for your business. This is something that's really important, especially as more struggling businesses are finding it difficult to secure or hold on to their small business loans. Businesses who are in danger of losing their small business loans need to be prepared to seek financing outside the normal lending parameters.

Be proactive about your small business financing, get smart advisory. Organizations like US Capital Partners can provide recapitalization advisory and assist you with the financial restructuring of your company.

If you would like to know more about how your business can secure the funding it needs, visit US Capital Partners, Inc. at http://www.uscapitalpartners.net/ or call (415) 882-7160.

Tuesday
Feb162010

Asset-Based Loans Now Preferred Alternative for Small Business Financing

As small businesses desperately struggle to obtain working capital for their businesses, they need to look outside the bankable box.  There is money available, as long as you are willing to look outside the normal lending parameters.

Asset-based lending (ABL) now a preferred alternative (NOT a last resort when banks say 'No'.) for small business financing.  ABL is not your grandmother's factoring anymore -- it's a modern, competitively priced product.

Businesses looking for financing solutions need a better understanding of the alternative financing landscape -- there is a whole range of products out there.

You can often get more cash for the same assets (or a variety of assets that the bank doesn't favor), and sometimes you can pay the same or less (depending on your credit risk profile) than a traditional bank.

Asset-based lending is not a last resort for when banks say, 'No.'  ABL is a smart funding alternative, and it's growing and often becoming a preferred alternative to banks.

Friday
Feb052010

Alternative Financing Myths in Wall Street Journal: Today's Asset-Based Lending is Not Your Grandmother's Factoring

I recently read a Wall Street Journal article that called asset-based lending a "last resort" finance option.
 

I wanted to respond to Kyle Stock's description of asset-based lending, which perpetuates the old wives' tales about alternative lending. Asset-based lending is not your grandmother’s factoring  anymore – it’s a modern product now.

In Asset-Based Lending Grows in Popularity, Stock states:

"Asset-based lending, once considered a last-resort finance option, has become a popular choice for companies that don't have the credit ratings, track record or patience to pursue more traditional capital sources. Because asset-based lenders focus on collateral, rather than credit-worthiness, they do deals that more traditional lenders shy away from. Borrowers put up equipment, inventory, accounts-receivable and other liquid assets in exchange for the money. Drawbacks include relatively high rates, and the ability of lenders to legally seize assets if the borrower misses payments."

People need to understand that asset-based lending is not a last resort, it's an ALTERNATIVE. Businesses can secure working capital that is slightly more expensive than (or in some instances at same price as) a commercial bank - but with more availability, meaning they can borrow more money from alternative lenders than the bank will loan out. 


Stock also states that:

"Many small businesses that seek asset-backed loans are distressed companies, or have spotty or short track records. "

There is nothing wrong with businesses that need alternative financing. What alternative financing does is gives you choices – especially in a depressed market, when the banks are weak or when bank loans aren't an option. 

What Stock overlooks is that commercial banks are not always the best choice. Sometimes alternative financing is a better option than traditional bank loans and could be a better financing solution for your company. 

There is an education void when it comes to options for small- and mid-cap financing. What would be helpful to businesses that need working capital are solutions and a better understanding of the alternative financing landscape. There is a whole range of products out there (and not just your grandmother's factoring). 

What we need is more content in the media and an educational effort to help people understand the types of alternative financing available. 

So what do you do if:

A) Bank borrowing is not an option
B) Your bank has asked you to leave (and no other bank with take you)
c) When banks say “no”

 
You actually have a ton of choices - including a whole menu of alternative financing options for small business.  What are you choices when it comes to alternative financing? You can get more cash for the same assets (or a variety of assets that the bank doesn’t favor). And sometimes you can pay the same, less or more (depends on your credit risk profile) than a traditional bank.

Asset-based lending is a vibrant part of the economy that’s only growing. It’s often a preferred alternative to the bank – and definitely not a last resort. Sometimes it is a last resort – but in that case, thank goodness it’s available. 

This is a huge industry, it’s growing, and it’s definitely not your grandmother’s factoring.

If you would like to know more about how your business can secure the funding it needs, visit US Capital Partners, Inc. at http://www.uscapitalpartners.net/ or call (415) 882-7160.

Friday
Feb052010

US Capital Partners News: USCP Serves as Co-Lender and Sole Arranger of $3.5 Million Credit Facility for Consensus Orthopedics

At US Capital Partners, we specialize in providing investment banking and lending solutions for small- to middle-market companies. Below is an announcement of one of our recent transactions. As you will see, we are able to serve as a direct co-lender and lead financial arranger. This widens our scope to secure the best possible financing for our clients. 

Check out our deal announcement in the ABF Journal.

You can also visit our web site to view additional US Capital Partners News. 
______________________________________________________________________

US Capital Partners, LLC (“USCP") announced today that it has completed with Bridge Bank a $3.5 million senior secured credit facility to Consensus Orthopedics, Inc., headquartered in El Dorado Hills, CA. US Capital Partners is a private investment bank, direct lender, co-lender, and lead financial arranger that specializes in asset-based loans for small- to middle-market companies. 


The financing facility will be used for working capital liquidity as well as other general corporate purposes to support the company's continued domestic and international growth. Consensus Orthopedics, Inc. designs, manufactures, markets, and sells orthopedic implant devices worldwide. The new credit facility included a revolving line of credit for both domestic and international assets along with a growth capital term loan for expansion.

“We have continued to turn to USCP to assist us in financing our working capital needs over the past 3 years due to their breadth of experience in asset-based lending,” said Colleen Gray, CEO of Consensus, a medical artificial joint implant manufacturer and distributor. “USCP has successfully structured and financed credit facilities on our behalf that increase our capital availability while decreasing our cost of capital.”

Bridge Bank is committed to working with great partners like USCP who bring us into quality relationships such as Consensus,” said Lee Shodiss, Senior Vice President and Manager of Bridge Bank’s Capital Finance Division (BCFG). “USCP did an excellent job understanding our underwriting criteria and presenting the deal in a professional and cooperative manner. USCP’s initial underwriting and efficient process was critical in getting this deal closed.” 

“We are delighted to secure this financing facility for Consensus with our partners at Bridge Bank,” said Jeffrey Sweeney, CEO and Managing Director of USCP. “Consensus, under the management of Colleen and her team, has successfully executed their operating plan over the last few years. It is a pleasure to serve as a co-lender to support a company’s capital needs that has demonstrated great performance and consistent growth.”

About US Capital Partners
Since 1998, US Capital Partners has been providing prompt, innovative, and reliable financing solutions including lending, corporate financing, and debt re-structuring to businesses across the United States and abroad. US Capital is a private investment bank, direct lender, co-lender, and lead financial arranger that specializes in asset-based debt for small- to middle-market private and public companies. The company’s innovative approach allows them to provide the best financing available, not only for companies in excellent financial condition, but also for companies who may have been refused credit by traditional lenders. 


If you would like to know more about how your business can secure the funding it needs, visit http://www.uscapitalpartners.net/ or call (415) 882-7160.

About Bridge Capital Holdings

Bridge Capital Holdings is the holding company for Bridge Bank, National Association.  Bridge Capital Holdings was formed on October 1, 2004 and holds a Global Select listing on The NASDAQ Stock Market under the trading symbol BBNK.  Visit Bridge Capital Holdings on the web at www.bridgecapitalholdings.com.

About Bridge Bank, N.A. Bridge Bank specializes in providing superior service and customized banking solutions to small and middle-market, and emerging technology business in Silicon Valley, California and the Nation.  The Bank’s product offerings include 24/7 internet-based business cash and treasury management, on-line account statement and item imaging, remote deposit capture, commercial lines of credit, growth capital financing, commercial real estate financing, international Export-Import financing and foreign exchange payment services, Small Business Administration 7(a) and 504 loans as an SBA Preferred Lender Participant-accredited direct lender, and factoring and asset-based loans through its Bridge Capital Finance Group. For additional information, visit the Bridge Bank website at www.bridgebank.com.  

Wednesday
Feb032010

USCP at the 2010 Asset-Based Capital Conference Held By the Commercial Finance Association

I'm just off to Las Vegas for the Asset-Based Capital Conference held by the Commercial Finance Association (CFA). This is the premier networking and educational event of the year for lenders, service providers and anyone else involved in asset-based lending in the capital markets. 


As lead arrangers and co-lenders, we look forward to this conference because we get to meet up with other lenders and key executives in the asset-based lending industry and to talk about how we can work together to solve problems for our clients. 

The event attracts alternative finance professionals from across the nation including asset-based lenders, hedge fund professionals/private equity investors, distressed debt professionals, workout specialists, DIP lenders, and factoring professionals. 


This is an important educational trip for us because as we collaborate with co-lenders and figure out how we can help them with gap financing on orphan assets, we also need to understand how their underwriting criteria has changed so we can be better informed when we're doing deals and bringing in co-lenders to help better serve our clients' needs. The conference also offers great opportunities to stay on top of the latest developments in the asset-based and second lien markets, especially in today’s rapidly changing financial market. 

I'm also looking forward to this year's new event, the CFA charity poker tournament, which benefits the CFA Education Foundation.

If you would like to know more about how your business can secure the funding it needs, visit US Capital Partners at http://www.uscapitalpartners.net/ or call (415) 882-7160.