Steve Bush asked:


Even though longer-term business finance techniques might be appropriate for many circumstances, there are some important short-term business loan options that will be less costly in producing improved credit card processing and commercial mortgage results for business owners. Short-term business financing choices can be misunderstood because of a preference by many business owners for long-term commercial real estate loan and commercial loan programs.

Two Important Short-Term Business Finance Options

Two of the most overlooked short-term working capital business loan strategies are short-term commercial mortgage loan programs and business cash advance programs in conjunction with credit card processing. Both of these business finance options are relevant for most business owners but are frequently misunderstood.

Short-term Programs for Commercial Real Estate Investment Financing

A long-term business loan is appropriate for many businesses that own commercial real estate investment property. Business properties should normally be financed with a combination of short-term and long-term business finance funds. When a longer-term commercial mortgage is viable, it is preferable to secure long-term business financing, preferably for 30 years.

However there will be many commercial mortgage loan situations in which longer-term real estate business financing is not appropriate for the business owner. In such circumstances it is important for a business owner to realize that there are viable short-term working capital management options.

When a Short-Term Commercial Mortgage is Appropriate

If a business owner plans to sell or refinance their business within a few years, it is preferable to explore short-term business finance options. The best short-term business loan will have minimal prepayment penalties in comparison to terms commonly included with long-term commercial real estate investment property financing.

The avoidance of business finance prepayment fees and lockout fees fees in some short-term business financing programs is an important benefit of these short-term commercial mortgage approaches. The absence of these potential fees could produce a savings of up to 20% or more if the business property is sold during the period which would have involved lockout fees in a longer-term commercial loan.

Short-Term Commercial Real Estate Investment Property Financing Limitations

There are some trade-offs that need to be understood if a business owner chooses shorter-term business financing even though prepayment fees will usually be avoided with a short-term business loan. When short-term commercial real estate financing is a realistic option, the loan-to-value will usually be no higher than 70%, the commercial mortgage will not be readily available for special purpose business investment properties such as golf courses and the interest rate will frequently be in the range of about 12%.

Best Investing Possibilities for a Short-Term Commercial Mortgage Loan

Warehouse, multi-family, office, mixed-use and retail business properties are the best possibilities for short-term business financing. Business owners should be comfortable with a time period of less than three years for a typical short-term business loan.

Fewer Mortgage Lenders for a Short-Term Commercial Real Estate Loan

There will typically be a very small number of commercial real estate investment property lenders who are effective at implementing the short-term commercial mortgage loan strategy properly. There are also a number of problems to be avoided with a short-term commercial real estate loan, so choosing an appropriate provider is extremely important to any business owner considering a short-term business finance program.

Credit Card Processing and Business Cash Advance Programs

For any business that accepts credit cards as a method of payment, a business cash advance is a critical working capital management tool that is often overlooked. Even thriving businesses frequently need more working capital than they can borrow. One of the least-known business finance strategies for successful businesses is potentially the single best working capital loan strategy for obtaining needed cash for growing their business: the use of a merchant cash advance or business cash advance program.

Primary possibilities to take advantage of this business financing program are service and retail businesses. This credit card processing and credit card financing strategy uses credit card receivables to determine the amount of a merchant cash advance.

Working Capital Management: Credit Card Financing and Credit Card Processing

This business financing technique is called credit card financing or credit card factoring. Some business owners might have used a business finance technique referred to as receivables factoring to sell future receivables at a discount and receive immediate cash.

Many service and retail businesses cannot document business receivables to obtain a business loan. Businesses such as bars and restaurants do not typically have receivables to use for business financing.

What these businesses do have in many cases is documented sales volume and documented credit card sales activity. It is this documented level of sales volume and credit card sales activity that becomes a financial asset to the business and its business finance strategies. Business cash advances from $5,000 to $300,000 can usually be obtained based on a merchant’s sales volume and future credit card sales.

A business financing merchant cash advance must usually be paid back in less than 12 months. For business owners that want to renew the working capital cash advance program, it is typically possible to get more working capital after payback of the initial advance.

Limitations and Problems to Avoid with Credit Card Processing and Merchant Cash Advance Programs

As with any successful business finance strategy, there will typically be only a small number of commercial lenders who are effective at implementing this working capital management strategy properly. There are also a number of problems to be avoided with business cash advance programs, so choosing the appropriate provider of this commercial financing service is extremely important to any business owner considering a credit card financing program.

The Maverick Marketeer asked:


These are the all around best network marketing tips for success. This check list will not only provide you with a recipe for success with network marketing but success in anything you choose to apply the method to.

I’d say that’s pretty powerful stuff eh…?

What many people seem to have trouble grasping is the fact that success it self, be it with business, sports or even academics, has the very same formula. Basically, if you know what it takes to be successful at one thing, you can often apply the very same approach in a different context and duplicate that same kind of success for yourself over and over again.

Network Marketing Tips #1:

This first tip for success is also one of the most difficult to master. Time management may sound like a simple thing, but that’s far from the truth of things.

Ask yourself,” how do I spend my average day?” How many hours do you spend working, sleeping, eating, traveling between places, etc.? There are only so many hours in a day. If you work 8 hours, and get 8 hours of sleep, you only have 8 more left to do everything else.

The point I hope to make here is that your time is extremely valuable. The average American watches 4 or more hours of television a day. That 4 hours a day, equals a 28 hours a week that could be spent building your success.

Network Marketing Tips #2:

This second tip is nearly as important as the first. Being able to properly budget your finances is a must for any successful business owner. Being aware of how you spend your valuable resources, like your time and your money, will allow you to decide how to use them to your best advantage.

Also when planning to advertise and promote your business or service, preparing a set budget will help motivate you to promote your business as wisely and effectively as possible.

Network Marketing Tips #3:

This third tip is one that keeps on giving. Be sure to a lot both time and finances toward continuing education with your chosen industry niche. Think of this as an investment that will undoubtedly give you a serious return provided you stick to it.

There are possibly dozens of helpful hints to be lain at your feet in hopes that the right combination will guarantee success for you and your business. However, if you can properly manage your time and you finances as well as maintain the focus to continually increase your business knowledge you will all but have such a guarantee already in hand.

Successfully mastering just these three network marketing tips will require focus, discipline, and dedication. These are characteristics a great majority of successful individuals share. Work hard to develop them within yourself and success is sure to follow.

Sean Marten asked:


The very terms “software leasing” and “software financing” are confusing to many businesspeople. This is due to the fact that software is typically not seen as something that is purchased over time.

This view is shared by both end-users, and the developers of software. Companies who think nothing of financing a vehicle or a new computer system will stress over how they will pay for expensive new business software. And the producers of software see no need for offering a software leasing or a software financing option.

But times are changing.

Third party equipment finance companies – companies who offer small and medium size businesses equipment financing and working capital – have responded to a need for software financing and software leasing. Thus, they are starting to include software amongst the equipment they finance or lease. There is one big overriding reason for this shift:

The High Cost of Buying Software

The simple fact is this: Software can be very, very expensive. Oftentimes more expensive than the hardware that runs it.

Now, keep in mind that when we are talking about software in this way, we are generally talking about “vertical software”. Vertical software is software that is written for a specific, narrow industry (this can include industry-specific point-of-sale software, ERP systems, specialized databases, etc). It is not software that’s available on the shelf at your local office supply store (the software you see there, even the business programs and operating systems, are “horizontal software” – they can be used across a variety of industries, and are relatively affordable.)

A good, clear example of vertical software is an auto parts store – they use software that’s specifically written for the auto parts industry. Another example is your local jewelry retailer – they likely use a point-of-sale system specifically made for the jewelry industry.

To understand how software financing and software leasing can positively affect a business, it is important to understand the advantages of vertical software first.

For most businesses, Vertical Software usually means far more efficient business processes. In the case of an auto parts store, for example, the software will already anticipate the thousands of automobile makes and models. And will almost certainly be updated every year. The jewelry store’s software will differentiate the subtle differences between two diamonds by any number of categories. And so on.

In fact, these “vertical” software programs are so effective, and become so crucial to day-to-day operations, that businesses often need this type of software to remain competitive. In many cases, it’s not an option to do without.

However, since the software is so narrowly focused, it usually comes with a hefty price tag. The developer will sell relatively few copies as opposed to a word processing program (which will sell in the millions), so they must get a premium for their work. Vertical software can sometimes reach five figures for a single license.

This brings an obvious problem: “Businesses need the software, but it’s very costly to buy outright.”

And that’s where software leasing and software financing come in – business don’t have to “buy” it upfront.

The Advantage of Software Leasing and Software Financing

The advantage of financing or leasing software is clear:

Software leasing and software financing take the huge up-front cost of new software out of the equation. Like most other business equipment, software is now beginning to be seen as a tangible asset (this was not always the case.) This means software can largely be treated as any other equipment purchase in the case of financing or leasing. A business can finance that new ERP system instead of having to budget a huge cash outlay.

This can be very beneficial to the bottom line, as software generally pays for itself over time. In fact, since “vertical” software almost always reduces the cost of doing day-to-day business, leasing or financing said software can actually create a positive cash flow right away.

But Who Offers Software Financing or Software Leasing, and how does it Work?

It’s true that software developers have been very slow to embrace the business model of software financing or software leasing. They would prefer to be paid up front for their software.

Likewise, banks, being part of an “older” industry, are also largely reluctant to finance software.

However, third party equipment finance companies who specialize in small and medium sized business equipment financing often offer attractive software lease and software financing packages. What happens is the equipment finance company pays the developer in full, and then provides the software to the end user under a finance or lease agreement, often at very attractive rates. In all actuality, it’s fundamentally the same as financing or leasing most other equipment.

Of course, like any other financing, the agreements can (and will) vary from traditional fixed rate financing to a “software lease” with a buyout at the end, etc. And the rates and terms also vary – your individual equipment finance company will have more details.

All in all, software financing and software leasing have definitely entered the business consciousness, and because it is so friendly to the bottom line, it is a business model that is here to stay.

Software leasing and Software financing are only a few of the services provided by Crest Capital. Regardless of the size of your company, Crest Capital can provide you with the equipment financing and working capital you need to successfully grow your business. Learn about financing options that can increase your bottom line and reduce your 2007 tax bill with a free online quote today.

Gregg Elberg asked:


Whether you are starting an import business or have an established importing business, it can be a very profitable venture if you have the right financing to grow your business. Imports are defined as: a good that crosses into a country, across its border, for commercial purposes; a product, which might be a service that is provided to domestic residents by a foreign producer; or a combination of the two.

Starting or running an import business has never been more profitable because of computers, the internet, and the availability of low cost imports from countries such as China and Mexico. These imports may be resold for up to ten times their cost depending on the competition in your field of operations.

It is essential that you have good, honest suppliers plus creditworthy customers with purchase orders for your imports. If you have the right financing, your business can grow exponentially. But how do you finance growth if your own resources or bank lines of credit are not sufficient to take advantage of big opportunities? A combination of purchase order financing, accounts receivable financing with inventory financing may be the solution.

Definitions:

Purchase Order Financing

Purchase Order financing is the assignment of purchase orders to a third party, a commercial finance company, who then assumes the obligation of billing and collecting. Purchase order financing can be used to finance all current and subsequent orders to improve your company’s cash flow. The process works as follows: 1) Your company obtains a purchase order for products to be sold another company; 2) A letter of credit may be issued, based on a finance companies’ credit, to guarantee payment to suppliers or factories producing the goods; 3) The order is shipped, delivered and accepted by your customer; 4) The customer receives an invoice for the goods; 5) The Purchase Order Company pays the supplier/factory; 6) a commercial finance company or Accounts Receivable Finance Company pays the Purchase Order Financing Company after the products are delivered to your customer; 7) The customer pays the commercial finance company for goods received; The accounts are settled and the profit is paid to you.

Accounts Receivable Financing

Accounts Receivable Financing is the selling or pledging of your company’s account receivable, at a discount, to a Factor, a Commercial Finance Company or to an Accounts Receivable Financing Company who may assume a risk of loss. You receive a portion, usually 80% to 90% of the face value of your receivables in advance of payment from your customers in return for a fee, or interest, to be paid to the commercial finance company. When the commercial finance company is paid by the customer, the appropriate fees are deducted and the remainder is rebated to you. “Accounts receivable financing” is also called accounts receivable factoring, factoring financial services, invoice factoring and cash flow factoring. The terms are used to convey the same meaning.

Inventory Financing

Inventory financing is a loan secured by the inventory of your business. Inventory finance enables import companies to hold more stock without cash flow strain and to generate more sales. Inventory finance is often part of a Purchase Order and Accounts Receivable Financing commercial finance package.

These three types of financing can enable an import business to increase purchasing capabilities dramatically; you can accept larger orders and grow your business exponentially. You can use your inventory to leverage your purchasing power. You can use your customer’s credit to obtain these three types of financing; and you can use the commercial finance company’s credit to obtain a letter of credit.

The concept of financing your import company with “other people’s money” is part of a safe and sound business plan. Add strong product quality controls, inventory controls, and good accounting to maximize the success of your import company.

Copyright © 2007 Gregg Financial Services

www.greggfinancialservices.com

Corte Swearingen asked:


One of the most important assets of any small business is the customer database. It is the foundation for all successful marketing programs, but many small business owners either fail to keep one or do not properly code it for use as a marketing tool.

If you currently do not have customer database software, run to Amazon now and purchase ACT! by Sage Software. ACT! is a widely used customer contact management software that is perfect for small business owners. I use it daily in my own business and can highly recommend it.

You do not need to be a large corporation in order to take advantage of the power of database marketing. Even a 1-person business can develop an extraordinary advantage by developing a customer contact database and learning how to use it for strategic marketing.

Most all customer database software will allow you to create custom fields. Below, I have outlined several types of custom fields I recommend you add to all your customer records.

Customer Type

Every small business has four distinct customer types they will want to code in their database. They are Suspects, Prospects, First-Time Buyers and Repeat Buyers. By coding these customer types in your database, you will be able to immediately pull out any of these various groups for specific marketing communication programs. Below is a summary of the four customer types.

The Four Customer Types

1. Suspects – During the course of running your business, you may obtain lists of people from business groups, tradeshows, associations, list rentals and other sources. Suspects are people you think may be interested in your products and services but have not made any initial contact with your company.

2. Prospects – Prospects are people that have made some type of contact with your business. Maybe they requested a free report or simply called to get more information on a product or service. A prospect has shown interest in your company but has not made a purchase yet.

3. First-Time Buyers – A first-time buyer has made a single purchase from your company. The goal now is to convert these first-time buyers into repeat buyers so you can sell them more expensive (and more profitable) products and services.

4. Repeat Buyers – Continue to build trust and confidence in your first-time buyers and they will become repeat buyers. By coding this group in your database, you will be able to quickly pull them out for special upsell/cross-sell offers and work to retain and build loyalty.

The big advantage of coding your customer database with these 4 customer types is that each customer type is at a different buying stage. Pull out all your Suspects and offer them something for free in order to convert them to a Prospect. Pull out all your Prospects and offer them something compelling to turn them into a First-Time Buyer. Pull out all your First-Time Buyers and start a program to upsell and cross-sell additional products and services. Gone are the days of marketing to everyone in exactly the same way. With database marketing, you can now market by specific customer type.

Target Market

I highly recommend you add Target Market as a custom field in your database as it will allow you to pull customer lists by specific market segments. The only reason to pass on it is that you have a type of business that is so narrow and focused, that you really have only one or two customer types.

The first step is to actually define your target markets. If you own an existing business, you should already have a good idea of your target markets. If you are a new business, you may need to research just who your target markets are.

By coding your target markets, you can mail special brochures and offers that are very finely tuned to that market. Doing this will help you create the most effective marketing message and focus it to just the right niche market.

Recency, Frequency, & Monetary Fields

These last 3 custom fields I recommend you create are the key to allowing you to put together powerful database marketing programs. Here’s a brief definition of each.

Recency

Recency is the term used for the date of last transaction. Why is this important to code? Because the best predictor of future customer behavior is past customer behavior. Customers that are more recent are more valuable to your business than customers that are less recent. Whenever a customer makes a purchase, you will simply go into their record and plug in the date of purchase into this Recency Field.

How do you use Recency in your marketing efforts? Let’s say you have 5,000 customers in your database and can only afford to mail 1,000 of them. Simply sort your database by Recency (most recent) and you will have 1,000 customers that are most likely to respond to your promotion.

Frequency

Frequency is simply the number of “transactions” that a customer has made with you since they have been added to your database. Again, the best predictor of future behavior is past behavior. Someone that has purchased from you three times in the past year is likely to purchase again. The “transaction” does not necessarily have to be a monetary purchase. It can be any type of contact that you can reasonably measure such as a web visit, a phone call, a completed form. Of course it definitely includes any and all purchase transactions. This field will simply contain a number that is equal to cumulative transactions.

Your Gold customers are those that are both recent and have a high frequency number. Make sure you work to retain these customers – they are the life blood of your business.

Monetary

This field will simply show a cumulative total of the money spent by a customer. Every time the customer makes a purchase, you will go in and add the value of the transaction to the number already there. Want a list of customers that spent a large amount of money with you? Simply sort your list by Monetary value and you’ll have a list of your high spenders.

I hope you take the steps required to code these important fields into your customer contact database. Get an advantage over your competition by using these custom fields and the power of database marketing today.