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Small Business Lending
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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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Wednesday
May122010

New Paradigm for Small Business Lending Focuses on Service and Customized Financing Solutions that Best Serve Borrowers' Needs

While the federal government seeks to bring down the unemployment rate by focusing on tight credit conditions for small business lending, what tends to be overlooked is the need for a new paradigm for banking in the coming years, especially after the recent debacle in the credit markets.  Because every business is different, the old paradigm based on calculated mathematical risk profiles is an obsolete, one-size-fits-all approach to lending that overlooks some great entrepreneurial opportunities. 

When bank borrowing is not an option or sufficient for securing adequate working and growth capital, businesses must look to lenders who serve clients by getting to know their business beyond a small box profile, and are therefore able to see opportunities and provide solutions as unique as each business model. 

My personal business philosophy is centered around service. And our business model at US Capital Partners is specifically designed and economically driven to put us in a customer-focused, fiduciary, position to provide much needed service and partnership with our clients. This is an unusual approach for an investment bank and what really differentiates us as an alternative small business lender. We also believe this is the new paradigm for banking in the coming years.

The United States remains one of the leaders in broad based business opportunities for innovation and opportunity. The combination of a favorable business climate, entrepreneurial mentality, and access to one of the largest markets in the world are what contribute to making the U.S. one of the leading places to start and grow a business. And this shift in the funding paradigm to find solutions that best serve borrowers' needs will enable more American businesses to leverage opportunities for innovation and growth.

You might be wondering what you can do if your business currently doesn't fit a bank's lending risk profile. Learn more about Alternative Financing Options: Securing Small Business Loans for Working and Growth Capital.

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. We will give your business the attention it deserves and find the most suitable product for you. We offer true one-stop financing and will work in partnership with you throughout the lending process. 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.

Tuesday
Apr272010

US Capital Partners, LLC Serves as Lead Arranger of $4.5 Million Credit Facility for Speculative Product Design, Inc.

Our team at US Capital Partners, LLC (“USCP”) has secured a $4.5 million senior secured credit facility for Speculative Product Design, Inc. (“Speck”), headquartered in Palo Alto, CA. We are a private investment bank, direct lender, co-lender, and leading financial arranger that specializes in business loans for small to middle-market companies.

The credit facility served to refinance Speck’s previous line of credit, and will be used to support the company’s continued domestic and international growth. Speck has become a dominant market leader in the iPod, cell phone, satellite radio, and electronic accessory category. The company is best-known for creating refreshing designs that offer quality, thoughtful features, and distinctive style. Its line of products can be found worldwide at Apple retail stores and at most major electronics dealers. The new credit facility arranged by USCP included an inventory revolver and an AR line of credit for both domestic and international assets. It was designed to eliminate working capital constraints and fuel domestic and international growth.

“USCP has structured and arranged an optimal financing arrangement for us,” said Irene Baran, CEO of Speck. “Working with its many affiliates, USCP was able to change our financing structure and increase our borrowing availability. We are really pleased with the result.”

We are delighted to have secured this financing facility for Speck. According to PricewaterhouseCoopers, smaller private companies will likely lead the economic recovery in 2010, especially those doing business in international markets, like Speck. These businesses are increasingly looking to capitalize on upcoming commercial growth opportunities, but they need financing that is affordable and intelligently structured. Our team at USCP specializes in arranging this for them.

About US Capital Partners, LLC
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.

Thursday
Apr152010

Small Business Owners Turn to Alternative Lenders After Real-Estate Bubble Bust According to Wall Street Journal

One of the best parts of my job is getting to educate small business owners on their finance options, so I was thrilled when I was recently asked to share my expertise with The Wall Street Journal on alternative lending solutions for businesses. In today's Money Hunt column, Emily Maltby explores collateral woes for business owners seeking loans.

Highlights from the article are below. And you can read the full article here: Real-Estate Bust Hurts Lending for Little Guys

Since the mortgage meltdown, business owners can no longer reliably count on homes or commercial properties to secure financing.

Business owners who don't have sufficient collateral in homes or commercial properties to satisfy banks are also turning to alternative lenders for asset-based loans.

A drawback: Such lenders generally exert a certain degree of control over the business's assets and can seize them if the borrower misses payments. For example, an owner may find that a client's payment must first be deposited into an account controlled by the lender, who will transfer the money only if it's deemed adequate in relation to the amount borrowed. But "alternative lenders are a little less stringent on the cash flow and may allow for tighter margins," says Jeffrey Sweeney, CEO of U.S. Capital Partners, an alternative lender in San Francisco. "It's a bridge back into traditional lending."

While people may leverage their personal assets for personal purposes – and then use those funds for their businesses, personal collateral is not typically a major criteria for business loans. The emphasis in small business lending is moving towards underwriting and credit analysis to make sure businesses can pay loans back.

In addition to looking at ability to make debt service, lenders will be looking at business viability. They will want to know if the business has cash flow or assets (accounts receivable, inventory, purchase orders, buildings, machinery and equipment) to prove ability pay back their debit. Pay back through operations – not personal collateral - is what's critical for business owners seeking commercial bank loans.

And for those looking for a bridge back to traditional bank loans, you can read more about Alternative Financing Options for Securing Small Business Loans for Working and Growth Capital.

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. If you are looking for financial support, visit US Capital Partners, LLC. at http://www.uscapitalpartners.net/ or call (415) 882-7160.

Monday
Apr122010

Small Business Lending News: Small Business Owners Falling Through the Cracks of Popular SBA Loan Program

A recent Wall Street Journal Article titled "Those Seeking Loans Are Left in the Lurch by Erratic Funding," highlighted the a small business owner's story as he slipped through the cracks of the lending process for loans backed by the Small Business Administration.

Bill Cimino was approved for a $1.6 million loan last year to purchase the property on which his Wilmington, Mass., car dealership sits. The loan was backed by the Small Business Administration and—thanks to the government stimulus program—carried no borrower fees and provided his lender with a substantial guarantee against default.

The loan was scheduled to close at the end of December, to coincide with the end of his lease, but paperwork delays pushed it until February—just as the stimulus money for the program ran out.

This is an interesting article and dilemma. The SBA loan program is a great product but the vender (bank) has to be equally as good and that is often difficult to assess. The SBA should not take the full blame for erratic funding - especially since it's really the banks that are notorious (to insiders) for not telling the complete truth about their lending capabilities. The SBA is a guarantee and not a government disbursement, and there has been no recent reports of the drying up of loan guarantees from the SBA. More likely, the bank may have been constrained and pushed off the problem to the SBA.

The article also mentions issues with paperwork delays that may have just been the bank marking time since they did not actually want to lend or have the money to lend. But in the meantime, the business development officer may have enjoyed having the deal in the pipe, with little regard for how these actions would affect the business owner.

It is also important to note that there are some nuances to the SBA program regarding the collateral they require and collateral they do not. Many times you can limit the SBA collateral to specific assets which will allow you to borrow more from a different source to provide additional working capital for your business. Additionally, small businesses should be aware that they can unlock credit with alternative financing solutions.

Read more about Securing Small Business Loans for Working and Growth Capital.

There definitely needs to be more said about small business lending as it is a fragmented industry. So I'm glad to see the section of the Wall Street Journal addressing this.

See additional highlights from Emily Maltby's WSJ article are below:

  • Lenders have historically issued loans backed by the Small Business Administration as a means to accommodate some of their more-risky Main Street customers because up to 75% of the loan would be reimbursed by the government in the case of default.
  • In the government's most recent fiscal quarter, the number of 7(a) loans—the SBA's most popular form of funding—jumped to 16,558, twice as many as in the year-earlier quarter. The total dollar amount more than doubled, hitting $3.75 billion. But in the depths of the credit crunch, lenders weren't enticed by the 75% guarantee and SBA lending plummeted. That prompted Congress to include provisions in last February's Recovery Act that temporarily boosted the government guarantee to 90% and dropped fees associated with the loans.
  • In total, $600 million has been allocated to the program, which has supported more than $23 billion in loans.

To find out more about how your business can secure the funding it needs, visit http://www.uscapitalpartners.net or call (415) 882-7160.

 

Sunday
Apr112010

Small Business Loans for Manufacturers Unlock the Value of Existing Assets to Secure Working Capital 

While most manufacturing companies can expect growth opportunities in the next year, getting traditional financing remains difficult as banks are still reluctant to finance small businesses. More manufacturing companies are turning to alternative small business lenders for working capital, and according to Bank of America Business Capital, 49% of manufacturing firms expect to use asset-based lines of credit in 2010, up from 42% last year.

When times are difficult, unlocking the inherent value of your assets, especially intangible assets, is attractive. Today, asset-based lending is affordable, offers flexible loan structures, and can provide the borrowing power that cash-flow lending alone may no longer be able to supply.

As experts in small business financing, our team at USCP directly lends or participates in funding asset-backed loans of $500,000 to $30 million for growth capital, working capital, assets, acquisitions, and liquidity events. Our small business loans are priced competitively and can come with fewer financial covenants depending on the business’s risk level.

Getting the right financing can make all the difference for a small manufacturing business. US Capital Partners recently arranged and was a co-lender on a $3.5 million senior secured credit facility for Consensus Orthopedics, a medical artificial joint implant manufacturer and distributor. The new credit facility included a revolving line of credit for both domestic and international assets along with a growth capital term loan to support the company’s continued domestic and international expansion.

What many businesses don’t realize is the extent to which they can leverage their business assets to secure funding. Alternative financing options can help businesses unlock the value of their assets to get the backing they need when the commercial banks say ‘No.’

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.