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 CEO and Managing Director 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

Entries in US Capital Partners (67)

Thursday
Jul182013

The Wisest Entrepreneurs Know How to Preserve Equity

Some entrepreneurs succeed in making million, if not billions, more than others by being careful not to sell too much of their business too early.

If an entrepreneur obtains venture capital financing early in the life of a business, it is typically at a huge cost. In exchange for this financing, the start-up’s founders will have to sell part of their company, thereby diluting their ownership. The decisions entrepreneurs make at this stage can have wide ramifications, not only for their future success but also for their profits.

Maintaining Your Share of Future Profits

As smaller companies begin to expand into new markets, they require capital to be able to take advantage of emerging growth opportunities that will significantly appreciate the value of the business and its equity. These smaller growth companies need to be careful not to sell too much equity at this stage. Based on appreciating valuation multiples that these growth companies can realize upon exit, equity will usually cost the business excessively more than debt, and will commonly also be accompanied by highly restrictive operating and board control provisions.

When Debt Is Preferable to Equity

To expand, a business needs ready access to capital. If you are a business owner, debt financing may be preferable to equity financing if you:

  • Have limited ability to raise equity due to size, market conditions, or dilution impact.
  • Do not want to substantially dilute your ownership interest in your business at this stage.
  • Do not want to surrender a share of future profits of the business.
  • Prefer not to relinquish operating control or strategic direction of your company and/or its Board of Directors.
  • Want to finance your business quickly without long lead times and uncertainty of closing.
  • Want to shield part of your business income from taxes. (If you finance your business using debt, the interest you repay on your loan is tax-deductible.)

Wednesday
Jun122013

Bridging the Gap in Small Business Lending

US Capital Partners is one of the few investment banks able to step in and fill the “gap” between what lenders offer and what borrowers really need.

The small business loan market remains stalled, as commercial banks keep lending standards tight and maintain an even tighter grip on capital. Alternative lenders are making a strong effort to bridge the ongoing lending gap. As the competition escalates, yields are being pushed downward, and alternative lenders are becoming more aggressive in their marketing, drawing attention to creative deal features and flexible loan structures.

The Ongoing Lending Gap

While this is good news for borrowers, alternative lenders continue to focus predominantly on middle market companies. There is still a giant lending gap in cash-flow, second-lien, and mezzanine loans for small businesses, especially companies with under $5 million in trailing EBITDA. Very few alternative lenders offer, for instance, $1–3 million cash-flow strips, which are truly a “gap” piece.

There is also a visible gap in equipment and real estate term loans, and also in growth-capital term loans, for small businesses. One of the reasons for the lending gap is that servicing these types of smaller loans can be expensive and time consuming. There is also a barrier to entry, with most alternative lenders lacking the necessary due diligence and underwriting skills to make these loans in the first place.

Small Businesses Remain Underserved

In its 2013 Capital Markets Report, Pepperdine University revealed that access to capital is the number one emerging issue facing privately held businesses in the US, especially small businesses. Interestingly, investment bankers in the survey reported a shortage of capital for companies with less than $10 million EBITDA, but a general surplus for companies with $10 million in EBITDA or more.

Closing the Lending Gap

Few firms know more about the needs of small businesses and the resources available to them than US Capital Partners. “We’re one of the few investment banks for small businesses that truly bridges the lending gap,” explains Jeffrey Sweeney, CEO and Managing Director at US Capital Partners. “We provide cash-flow terms loans of $1–5 million and upwards to bridge an asset-based lending or factoring shortfall. We also provide equipment and real estate term loans, as well as growth capital financing, to small businesses.”

Wednesday
Feb202013

Join US Capital Partners in Supporting the San Francisco Food Bank

At US Capital Partners, we believe in the importance of being an active member of the community. That’s why we support charitable organizations around the world and at home.

We are proud to provide monthly assistance to the San Francisco Food Bank, an organization that has been fighting hunger in San Francisco and Marin for the past 25 years. Recently, the struggles people have faced as a result of the recession and slow recovery have necessitated herculean efforts from organizations focused on providing food to the hungry.

Despite the difficulties, people have responded with an outpouring of support. Thanks to the efforts of thousands of community donors, volunteers, and employees, the Food Bank has distributed an impressive amount of food to those in need. In 2011, for instance, the SF Food Bank served 225,000 people and distributed an average of 100,000 meals a day.

The need for food, however, has not subsided. The SF Food Bank estimates that one in four people in the Marin and San Francisco area is underfed, while the number of people who are at risk of being underfed has doubled since 2008. Donations are needed now more than ever, and US Capital Partners plans to continue its commitment to feeding the hungry in San Francisco, Marin, and abroad.

For more information on the San Francisco Food Bank, visit sffoodbank.org.

Tuesday
Aug072012

US Capital Partners’ Affiliated Private Investment Firm Completes Financing of WebXU, Inc.

Private investment firm affiliated with US Capital Partners finances growing Los Angeles-based Internet media company.

SAN FRANCISCO, August 2012 – US Capital Partners’ affiliated firm Breakwater Investment Management, LLC (“Breakwater”) has provided senior secured bridge financing for Internet media company WebXU, Inc. (“WebXU”). US Capital Partners is a leading provider of debt and equity financing for small and lower middle market businesses. The company is a division of Breakwater, a private investment firm that specializes in direct investments in small to lower middle market growth businesses.

 “WebXU approached us for a bridge loan and for growth capital financing, following its successful acquisition of Lot 6 Media, LLC,” said Jeffrey Sweeney, CEO and Managing Director at US Capital Partners. “At US Capital Partners, we always look for the best possible financing solution for our clients. In this case, we were able to arrange financing ourselves, by referring the company to Breakwater.”

About WebXU, Inc.

WebXU, Inc. (OTC.BB: WBXU.OB) is an innovative and growing Internet media company headquartered in Los Angeles, CA. The company owns and operates a network of consumer websites and businesses focused on e-commerce, customer acquisition, and social media. Through its network of branded web properties, WebXU connects consumers with higher education, financial services, insurance, electronics, and other offerings.

About US Capital Partners, LLC

Since 1998, US Capital Partners (www.uscapitalpartners.net) 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 Partners 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 it to provide the best financing available, not only for companies in excellent financial condition, but also for companies that may have been refused credit by traditional lenders.

If you would like to know more about how your business can secure the financing it needs, email Jeffrey Sweeney, CEO and Managing Director, at jsweeney@uscapitalpartners.net or call (415) 889-1010.

Tuesday
May012012

US Capital Partners Assists Baby Care Product Company

Developer of Baby Care Products | $1,000,000, RefinancingU.S. Capital Partners (USCP) works to secure the best possible financing for clients by broadening our range, serving as lead arranger, direct lender, and co-lender. We employed this strategy recently with a business client that was in need of access to more flexible funds in order to expand its operation, and we were able to secure a $1 million revolving line of credit for them.

Our experienced and skilled financial team at USCP was successfully able to secure the $1 million revolving line of credit for a baby care product company because we made it our business to understand their business; in other words, we conducted a thorough survey of the company’s product, service, market, and business model, in addition to their principal net worth, practices we often employ with our clients to accurately determine their needs and the best possible resources to attain those needs. This particular client required timely access to additional working capital in order to introduce new marketing and sales initiatives, and we were able to help by refinancing their current debt with a commercial bank that is in and we were able to provide that for them in a prompt manner.

Based in California, this baby care product company creates, markets, and distributes fashionable products for babies and parents (primarily babies), including luxury blankets, burp cloths, bibs, and hooded bath towels.

To view more of US Capital Partners recent transactions visit our website at www.uscapitalpartners.net/transactions.html.

U.S. Capital Partners investigates all aspects of a company to craft optimum, customized financial solutions for our customers. We are often capable of increasing opportunities to achieve a successful resolution by discovering credit enhancers and ways to mitigate risks to credit. If you or your company are struggling to secure a credit line that could help provide your company the working capital it needs, give us a call at (415) 899-1010 or visit us online at www.uscapitalpartners.net. Our team of experienced professionals is ready to discuss your financing needs with you.