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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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Thursday
Mar252010

In Tough Times for Small Business Lending, 49% of Manufacturing Firms Will Use Alternative Financing Solutions in 2010 

I recently blogged about how many small manufacturing companies are leveraging their business assets to secure financing - while others continue to struggling to stay afloat or are finding it difficult to capitalize on upcoming commercial growth opportunities. Securing traditional financing through banks and other financial organizations has now become highly challenging. As banks pull back more traditional commercial-and-industrial lending, they are no longer willing to lend even to small businesses with solid financials. Their security demands have also increased. This has pushed some companies to distress. It is preventing many others from taking advantage of commercial growth opportunities that lie ahead.

How Manufacturers Are Leveraging Their Business Assets to Secure Financing 

Unsurprisingly, businesses are increasingly turning to suitable private banks and other alternative lenders. 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. This type of alternative financing, once considered a last-resort, is now regarded as a fundamental financing solution.

Since alternative lenders in this space generally focus on collateral, rather than credit-worthiness, they are able to do deals that more traditional lenders shy away from. The Commercial Finance Association, an industry trade group, has reported that the asset-based lending market is now worth $590 billion. Loan volumes have been increasing by an average of 10% a year.

Getting the Financing You Need

When times are difficult, unlocking the inherent value of your assets, especially intangible assets, is attractive.

Today, small business financing is affordable, offers flexible loan structures, and can provide the borrowing power that cash-flow lending alone may no longer be able to supply. At US Capital Partners, for instance, businesses can borrow money using their liquid, current assets or their fixed assets as collateral. Our asset-based loans are priced competitively with cash-flow loans, and come with fewer financial covenants. They can be used to secure working capital, but also to finance growth or acquisitions.

Getting the right financing can make all the difference for a small manufacturing business. Earlier this year, US Capital Partners arranged and co-loaned 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.

It is important that your small business lender is able to provide you with service that matches your company’s specific needs to appropriately priced capital. It can also be helpful and cost effective to work with a firm that not only arranges asset-based financing for small businesses, but is also able to offer funding – especially in situations where they can provide additional sources of capital from their own fund to “fill the gap” in your required capital.

If your manufacturing company is struggling to stay afloat or finding it difficult to capitalize on upcoming commercial growth opportunities, know that there is new financing available despite these tough times for small business lending.

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

Tuesday
Mar232010

Small Business Lending: How Manufacturers Are Leveraging Their Business Assets to Secure Financing 

Many small manufacturing companies are either struggling to stay afloat or finding it difficult to capitalize on upcoming commercial growth opportunities. Find out how manufacturing companies can get new financing in tough times for small business lending. Also learn about alternative financing options that can unlock the value of your assets to secure working capital for your business.

The good news: Most manufacturing companies expect growth opportunities in the coming 12 months. According to the 2010 CFO Outlook, published by Bank of America, 69% of manufacturing company CFOs are considering financing in 2010, up significantly from last year. The top two reasons for small business financing are working capital and capital expenditures.

The bad news: Two years ago, getting six-figure traditional financing for a smaller manufacturing business was fairly straightforward. Today, it remains about as difficult as when the financial crisis first began to unfold. Banks are as reluctant as ever to finance small businesses, as they continue trying to limit their risk amid the economic turmoil. According to the FDIC, the volume of bank loans dropped in 2009 by $587.3 billion, or 7.5%, from 2008—the biggest full-year decline since World War II.

The result: Many small manufacturing companies are either struggling to stay afloat or finding it difficult to capitalize on upcoming commercial growth opportunities. According to the 2009 Year-End Economic Report published by the National Small Business Association, 39% of small businesses report they are unable to get adequate financing for their business. No doubt many of these are manufacturing companies.

So where should smaller manufacturing companies go to get the financing they need? The answer is to the most competitive and experienced private banks and alternative lending groups for small businesses.

Alternative Financing Options: Unlocking the value of your assets
If you’re a manufacturing company, there is simply no need to let your business be held hostage to the ongoing credit crisis. This is because there is already a well-developed market for alternative financing that can provide working capital for small businesses with assets, such as cash flow, accounts receivable, inventory, purchase orders, premises, machinery and equipment, and even the intellectual property associated with a brand or patent.

What many businesses don’t realize is the extent to which they can leverage their business assets to secure funding. Help for small business lending is not on the way: it’s already here. Alternative financing options can help many businesses get the backing they need when the banks say “No.”

Best of all, this type of financing is now affordable. Loans from the most competitive private banks and small business lenders are priced at bank-like rates upwards, depending on the level of risk of the business being financed.

Securing traditional financing through banks and other financial organizations has now become highly challenging. As banks pull back more traditional commercial-and-industrial lending, they are no longer willing to lend even to small businesses with solid financials. Their security demands have also increased. This has pushed some companies to distress. It is preventing many others from taking advantage of commercial growth opportunities that lie ahead.

Businesses are increasingly turning to suitable asset-based lenders. 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. This type of alternative financing, once considered a last-resort option, is now regarded as a fundamental financing solution. Since alternative lenders in this space generally focus on collateral rather than credit-worthiness, they are able to do deals that more traditional lenders shy away from.

Earlier this year, US Capital Partners arranged and co-loaned 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.

Read more about how alternative financing can help you unlock the value of your assets to get the financing you need. 

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, Inc. athttp://www.uscapitalpartners.net/ or call (415) 882-7160.

Thursday
Mar182010

Alternative Financing Options: Securing Small Business Loans for Working and Growth Capital

While U.S. data reportedly shows the economy on a modest path to economic recovery, many businesses are still struggling to stay afloat or finding it difficult to capitalize on upcoming growth opportunities. 

Here are some tips to help you secure small businesses financing:   

What can businesses do if bank borrowing is still not an option?
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. With alternative financing options like asset-based lending, 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. Read more. 

How can business owners measure the risk of their bank calling their small-business loan? Business owners need to be aware that many companies are in danger of losing their current bank loans. There are a few fundamental and relatively simple questions you can ask yourself to determine your risk of losing your small business loans. Essentially, there are two categories of assessment when measuring the risk of losing your small business financing: the type of loans your company has and your company’s financial performance. Read more.

What can businesses do if they don’t fit the bank’s lending risk profile? Alternative financing options can help many businesses get the backing they need when the banks say “No.” These loans are also helpful and necessary to get a business back on its feet by providing capital for your business to help make it through the downturn into the recovery so you can once again qualify for commercial bank loans at lower rates. For small or mid-size businesses that need to raise capital, it’s important to understand that the current system can work for them, but few people know exactly how it works and how to get results. Some do know, but the vast majority do not - and this includes users as well as advisors and bankers. Read more. 

How can businesses make smart decisions about recapitalization and financial restructuring to continue securing working capital? It is important to find the right advisor to help you restructure your finances and secure alternative funding so you can raise the working capital you need. You need someone who knows what he or she is doing in the alternative lending space including being familiar with the many lenders and having the experience necessary to negotiate and shop loans to appropriately priced sources of capital. There are a few true investment bankers in the small-business arena that can serve as both a lender and lead arranger or advisor on restructuring small-business debt. When it is cost effective, these firms can bring in another lender for your loan, then provide additional capital from its own fund to “fill the gap” in required capital to take the bank out in the most cost-effective way. Read more. 

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.

Monday
Mar012010

U.S. Banks' Small Business Lending Falls at Epic Pace

I recently read an article in the Wall Street Journal about how small business lending remains steady on a downward trend unseen since 1942. Top-tier banks may be on the mend, but banks geared to small business financing have seen a full-year decline in lending for small businesses and a record 702 banks are at risk of failure.

While policy makers push for banks to increase small business lending, a combination of prudent lending, less demand, and rare creditworthiness is contributing to the decline, expected to last through 2010.

According to the article Lending Falls at Epic Pace by Michael R. Crittenden and Marshall Eckblad:
 
“It remains unclear whether the sharp decline in loans outstanding stems from banks’ tightening standards and a fear of lending, or from weak demand from potential borrower spooked by the downturn.”

In any situation, it’s important for struggling businesses to be pro-active instead of reactive about protecting their small business financing. I recently blogged about what you need to do if your bank is one of the 700 on the FDIC’s ‘Troubled’ List.

Smart financing advisory means looking for solutions even while small business lending hits the bottom of the credit cycle. There are alternatives for small business financing that services like US Capital Partners can help your business secure.

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.

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.