Make it rain!

Yep... Make it rain on them droids.

Ok, ok, I get it. Mike has now posted a picture of Spock and of R2D2, what's the deal?

Is Mike, our endearing scribe, a total nerd? Is he a TREKKIE?

Simple answer: No, but this did make me chuckle

May the factor be with you!

Is the Death Star eyeing up your business?
Let Lenders Commercial Finance be your fighting "Force" with a Small Business Loan

Christmas Vacation Pool Scene - Happy Holidays!

Since we are 'dancing around the Christmas tree,' and I am drawing a blank on Asset-based lending topics. Therefore, without further adieu, the infamous pool scene from National Lampoons' Christmas Vacation!

Have a great Holiday from Lenders Commercial Finance!

Small Business Loans to make your spirit bright!

Fickle Facebook?

Just letting our viewers know that we have joined the Social Media craze, and threw up a simple facebook fan site. If you like what I'm writing, or just want to drop a line. Stop by at: http://www.facebook.com/LendersCommercialFinance

Live Long and Factor!

-Mike

Your helping hand in small business loans

iFinance - The benefits of a SmartPhone Business

Most ears have adapted to the subtle ding from our pocket, as another email is jammed into our inbox.
A quick glance to see if it has arrived from a work or personal account dictates the response. How drastically has mobile technology changed the daily workspace? Come one, you know as well as I do, it has changed it beyond recognition!

As I stopped by the Starbucks down the block from my office today, and was casually awaiting my holiday latte, I heard that charm that makes you check your phone, of course it was a work email. So as I stood amidst a cluttering and clanging pack of monkeys in suits, my response was sent.

Now having this technology is becoming both a curse, and a blessing. You have access to your email, work accounts, etc. anywhere you go. Sure it comes in handy, but I am still a believer in the thought process of never taking your work home. Once a person does that, it can make things stressful at the home-front. Whether it be taking time at the table to respond to a text or an email, the technology is also driving attention away from peer to peer activities. It's revolutionizing how we do not have to interact face to face anymore, and changing the structure of everything.

Since I was a kid, and got to hang on my father's coattails in his hectic life as a realtor, I always enjoyed the Mad Men style of business that went on. Exchange phone calls, emails, meetings, wine and dine, etc. It added a sense of the 'big time,' where every interaction and meeting gave a sense of accomplishment and satisfaction.

That is what I strive for in business, the feeling of accomplishment, and the classy sense of treating my clients well with any meeting or phone call. My generation cannot be responsible for the decrease in the cordial mannerisms of the business world.

How will the changing technologies affect our personal relationships in business?
I think the business loan industry is full of personal interactions that change everyday, and help me grow fond of the classic style of business.

The Fine Line Between Luck and Hard Work

As a member of a family that has many entrepreneurs, I have wondered for many years, is success yielded from pure luck, or hard work? Many people that have discussed this topic claim it can be all of one or a happy mix of the two.

The reason behind this topic comes from watching the Ironman Triathlon in Kona, Hawaii. This race is the world's most physically taxing race. It starts with a 2.5 mile swim through wind gusts and ripping waves, followed by a taxing 112 mile bike ride. The crowning gem to the race is the 26.2 mile marathon to finish off the race, where many fail, and some succeed.

Sure, it takes a lot of physical preparation for the race, but no matter how determined you are, sometimes luck runs out, and things happen. A racer could get a flat tire, a cramp in an arm while swimming, a random case of shin splints. A minor stroke of bad luck can sideline a racer. Then there is the determination side of it. If you want to do it, maybe you will get lucky enough to break the pane of the finish line into a gratifying finish.

This is the rub. No matter how hard you work all of your life, maybe you will not become a millionaire, but maybe if you work your fingers to the bone, a spark is ignited, and an idea is born. Then your nurture the idea into a business, and call it a success. Maybe it wasn't worth millions, but maybe you have a good life, and something to give to your kids, that is personally worth millions.

At what point do we call it a stroke of good luck, or when do we begin to call it hard work and dedication?


As a big runner, and fan of alternative sports like triathlons, fun runs, and most extreme sports, I think it is a big personal gain to set a goal for yourself like a couch to 5k, get involved in local sports, or just join a gym. The experiences people will share, and the opportunities that are laid out in front of you can be the just the change you are looking for.

Let Lenders Commercial Finance help you with your next big goal in life. Our asset based lending can help make the dream, a reality



<a href="http://www.99trader.com/">99trader.com</a>

Dave Matthews Band - Grey Street (Live at The Gorge)

It was one of those days... On Grey Street!

The Weight of a Personal Guarantee

The weight of a personal guarantee, what does it hold anymore?

My Associates and I sat pondering this today, after a potential client called in. His dilemma was simple; he needed about $300k of Accounts Receivable Financing for his business, and conveniently, he called Lenders Commercial Finance.

We have been discussing doing asset-based lending with companies like this recently. These are the new trend of web-based businesses, that are doing either advertising, marketing, SEO, or what seems to be a limitless list of options. Our dilemma is this: We have a company that has a Pro Forma that is almost unbelievable, or is it? If you can simply find build a market share for someone on the internet, or gets traffic directed to adds, and continue to expand the horizons of that business, it is believable.

The problem with some financiers today, is that they are on the uphill side of the technology curve. Their experience was on pen and paper, or a typewriter, and they cannot wrap their arms around a concept of a webpage making a huge amount of money. Fortunately, we at Lenders Commercial Finance, are not on that learning side of the curve. We have a very informative and educated staff, where we share ideas, create ideas, and sift through other's ideas, to make profitable business decisions.

Our big point at hand in this article, is the fact that we are discussing ideas of financing online businesses, and with this idea, we need things like a personal guarantee to back up our decision to finance them. So if you are looking for a chunk of financing, with a somewhat "exponentially profitable" business, why can you not offer us a personal guarantee?

It reminds me of the days when a handshake sealed a deal over cocktails and a meal. Now paperwork, credit checks, and a cadre of other pre-requisites are needed to have anything be finalized. If you are blazing trails for an entrepreneurial business, there shouldn't be a reason that you, the person on this venture, wouldn't back it whole-heartedly.

What does a personal guarantee stand for anymore? Does it say, yes, I am a businessman, and my life and soul is this business, or does it say: sure I'll agree to whatever you would like, as long as you just hand me that check?

As Bob Dylan said, Times They are a Changin'

Since we are closing in on Thanksgiving, I thought I would throw this out for fun.

How Many Calories Will We Really Eat On Thanksgiving Day?

November 19, 2012 By Mary Beth Quirk

The diet always starts the day after Thanksgiving, right? Because we know that every year, we’re going to stuff a large amount of fowl, potatoes, pies, dressing, rollscakesgreenbeancasserolewhippedcream etc. into our stomachs until it feels like the universe will explode into a huge, gravy-covered mess. Part of our collective overeating shame could be tied to the oft-cited statistic that the average person will eat more than 4,500 calories on Thanksgiving Day. But is that really how much we’ll ingest?

The New York Times wanted to get to the bottom of that astronomically high number which is inked back to the Calorie Control Council, the people who represent diet food companies) to make sure we’re not feeling guilty and claiming to start diets we’ll most likely never start.

One way to debunk a theory is to put it to the test, so writer Tara Parker-Hope jumped right in by cooking up a Turkey Day feast. Here’s what she made:

• A six-ounce serving of turkey with the crispy skin on, including 4 ounces of dark meat and 2 ounces of white for a total of 299 calories.
• Sausage stuffing at 310 calories — go big or go home, right?
• Dinner roll with butter for 310 calories
• Two kinds of potatoes are always in order during the holidays: Big serving of mashed sweet-potato casserole made with butter, brown sugar and topped with marshmallows for 300 calories per serving, and a half-cup of mashed potatoes for  140 calories of starchy goodness.
• Green bean casserole at 110 calories for 2/3 cup, cranberry sauce at 15 calories and roasted brussels sprouts (veggies!) for 83 calories.
• Then there’s pie that has to get shoved in there — pumpkin pie at 316 calories per slice, pecan pie for 503 calories and lots of whipped cream on all of that at 100 calories.

Grand total: 2,486 calories.

No one could look at that list, eat everything on it and complain of having room left over. Even if you add in breakfast and some booze and sure, you could get close to 4,500 calories, but it’s probably not as normal of an occurrence as we think.

Our stomachs can usually only fit about 8 cups of food on average, and after ingesting 1,500 calories our bodies emit a hormone that causes nausea. Which means, “STOP EATING, self! You’ve had enough already.”

Go on and test it yourself this Thursday. But don’t feel too horrible if you’re not ready to start that diet on Friday. You’re probably not doing as much damage, calorically speaking, as you thought you were.

We at Lenders Commercial Finance, wish you and yours, the best of Holidays!

When you snap out of your food coma, we hope we can help you free up some working capital

That's a Big Twinkie...

Who ya Gonna Call? LCF!

Working Capital for the Working Man

The Tumbling Twinkie

An article I found that discusses the epic downfall of the Twinkie.

Here's to a little bit of fat America going away!


This Story was written By John Carney | CNBC 

When Hostess Brands announced that it would close up its operations, the forces most responsible for that decisions were two hedge funds that control hundreds of millions of the debt of Hostess have finally decided that they won't squeeze any more filling into the Twinkie.

The funds, Silver Point and Monarch, are what are known as distressed debt investors. They buy the debt of troubled companies-usually at steep discounts. Some consider them white knights who are willing to take make risky investments in companies on the verge of failure. Others say they are "vulture funds."

Only Silver Point and Monarch could have kept Hostess out of liquidation and kept the Twinkie bakery ovens firing. But they were, ultimately, unable to reach a deal with the unions that represents the workers who make and deliver products like Twinkies, Wonderbread and Ding Dongs. Without large union concessions-what some would say, total union capitulation-the hedge funds decided Hostess would have to die.

This is not the first time Hostess Brands has entered bankruptcy. Weighed down by an balance sheet heavy with debt and pension obligations, costly labor rules, and declining sales, the company sought bankruptcy protection under Chapter 11 in 2004.

After nearly five years in bankruptcy, Hostess emerged in 2009 under the control of a private equity firm called Ripplewood Holdings, which invested $130 million of new capital in the company. The keys to coming out of the bankruptcy the first time around were concessions by the two groups most responsible for Hostess falling back into bankruptcy just 3 years late: the unions and lenders that owned secured company debt nominally worth around $450 million.

In the deal that allowed Hostess to come out of bankruptcy, the unions agreed to concessions that would save the company around $110 million a year in labor costs. The lenders, led by the hedge funds Silver Point and Monarch, agreed to provide a new secured loan of $360 million, forgive half the existing debt, and exchange the rest of that debt for a payment-in-kind loan.

(Read More:NOOOOOOOO! Say It Ain't So! Twinkies Maker to Liquidate, Lay Off 18,500)

It's worth mentioning that we don't know how much of a loss-if anything-Silver Point and Monarch took on the loans by agreeing to reduce the amount outstanding. As David Kaplan pointed out in hisextensively detailed article in the August 13th issue of Fortune, the amounts the hedge funds paid for the debt are not in the public record. Distressed debt funds-critics call them vulture funds-typically pay far less than face value when buying the debt of troubled companies.

This wasn't enough to save the company.

The company's sales declined and attempts to roll-out new products more in line with changing consumer tastes flopped. Ripplewood put tens of millions more into the company in the form of new equity and subordinated debt. Silver Point and Monarch put in another $30 million and then, after the company filed for Chapter 11 again in January of this year, another $75 million.

What happened next was just a mess. The CEO quit. The unions described the pay of the new CEO as "looting." Acrimonious would be a very mild term to describe relations between management and the unionized workers. One person familiar with the matter described it as "all-out war." The place to turn for the details of this is, again, David Kaplan's Fortune article.

Ripplewood basically fell out of the picture during this period. Its equity investment was worthless, and it's subordinated debt was deeply underwater. It just stopped showing up at negotiations with the unions, according to Kaplan.

The folks left at the negotiating table with the unions were Silver Point and Monarch.

Here's how Kaplan put the situation as of last summer:

What the hedge funds want is some degree of capitulation from a union whose members will otherwise lose thousands of jobs in liquidation. If the hedge funds don't get it, they've concluded, the company isn't worth saving. Without the hedge funds' blessing, no Hostess turnaround is possible. Right now, according to sources with knowledge of Hostess's debt structure, Silver Point and Monarch each hold Hostess obligations with a market value of between $50 million and $100 million. Those sources also say each hedge fund probably paid somewhere between $125 million and $175 million for that debt. So even with losses to date, both hedge funds have ample skin in the game -- skin they'd like to get out of the game sooner rather than later. Of course, if the hedge funds again forgive sizable debt, they'll probably want sizable equity in return this time.

Finally, there are the woebegone Teamsters. They have plenty of skin as well -- and feel as if they've been fleeced out of almost $100 million from Hostess after the company "temporarily" ceased making union pension contributions last August. That move by Hostess was a breach of its collective-bargaining agreement with the unions. The Teamsters' leadership has fulminated to its membership about the hedge funds in particular. "The financial folks make a living of feeding off distressed companies," Hall says. "They lose sight of the fact that there are real families with livelihoods at stake." At local unions across the country, the hedgies have become the devil incarnate.

Now we know how this story ends. The Teamsters agreed in September to a deal with reduced pay and benefits. But the Bakery Workers union rejected the deal and went on strike. Hostess warned that if the strike continued it would not be able to stay in business. But the strike went on. And now Hostess is out of business.

The hedge funds concluded that Hostess isn't worth saving. The unions either bet the hedge funds would blink before putting the company into liquidation or decided that it was better to sacrifice the jobs of Hostess workers than give in to demands for further pension concessions.

(Read More: Not So Yummy: 15 Major Fast Food Failures)

Although it now appears that Hostess is done, this is not the end of the story. The brands Hostess owns retain value. Someone will likely produce Twinkies again. The plants and workers are also valuable and will likely find bidders. Silver Point and Monarch-as well as the other secured creditors-will realize some value for their investment in the company, although certainly far less than they had hoped. (But, since we don't know how much they spent on the debt, we may never know whether they gained or lost on the deal.)

And, of course, we'll be in for a long bout of recriminations as everyone involved points fingers at everyone else. The truth of the matter may just be that Hostess was a failed enterprise that just could not be saved.

Side Notes and Advertising

Asides from being financiers, we share some odd talents and hobbies around the office.

Some of our biggest hobbies are as follows:

Cal: Has managed businesses with annual turnover in excess of $25 million and he has led sales teams of up to 15 producers across multiple states. He has been president of a thrift & loan company and he has started two commercial finance businesses de novo. One of Cal's favorite pastimes when he is not making financial magic happen, is that he is a self-proclaimed "foodie," and loves exploring the depths of the city for his next dining excursion.

Ken: A native New Yorker, Ken has lived in the Bay Area for over 20 years now. Asides from making a hobby of starting successful businesses with business partner, Steve, he has a few other mainstays that keep him busy. An avid wine aficionado, he can be found tasting many of Napa Valley's finest Cabernet Sauvignons. Ken and Steve are also licensed pilots, and enjoy taking their prized Socata TBM 700 through the skylines.

Steve: A born salesman, Steve is the voice on the phone. Ken has quoted him as a pure natural, and the best at what he does. The man is a true intellect. Not only does his collection of literature captivate, but he possesses a wealth of knowledge. Steve's true passion lies on the asphalt. You can find him racing his Ford GT Xtreme at tracks like Laguna Seca, or working with his race team, SNT Motorsports

Mike: Your trusted and loyal scribe, Mike was born in "Amish Country," Lancaster Pennsylvania. After receiving his BS in Marketing, from Millersville University, he took to working in Logistics in New Jersey. While this sounds like a cookie cutter story, it wilted like a flower in winter. A dedicated musician, artist, and antique advocate, Mike is multi-facted. Many summers were spent exploring the West Coast of the states, and finally made the move to sunny California in mid 2012. Now working at Lenders Commercial Finance, he could not be more excited to take the financial 'bull by the horns' at LCF.






After an enjoyable meeting, I wanted to just say, as a musician, check out Mono Case

Their Products are sturdy, reliable, gorgeous to look at, and impossible to be disappointed with.

Financial Fables dressed as Financial Rules of Thumb

A fun article that talks about financing fables...

1. Red cars are more expensive to insure.

You may also believe: If three people are photographed together, the one in the middle will die first.
Reality check: How much you pay for your insurance has absolutely nothing to do with the color of your car. It depends on the car you drive, your age, and your driving record.

2. Buying a home is always better than renting.

You may also believe : It’s bad luck to leave shoes upside down.
Reality check: During the last real estate run-up, this mantra was repeated ad nauseum. The truth is, sometimes paying rent may make a lot of sense. In exchange for that rent, you get a place to live without the commitment and costs that come with owning a home. For a lot of people, the added responsibility is more hassle than it’s worth.

3. Avoid adjustable-rate mortgages like the plague.

You may also believe: If you swallow a watermelon seed, a watermelon will grow in your stomach.
Reality check: If you’re absolutely positive you’ll only live in your house for a short time, an adjustable-rate mortgage (ARM) may save you money – even when rates are rising. This is especially true for hybrid ARMs, where the loan’s interest rate may remain fixed for, say, three or five years before readjusting.

4. When planning for retirement, assume annual stock market returns of 8 percent.

You may also believe: A cow lifting its tail is a sure sign that rain is coming. (Well, it’s a sure signsomething’s coming.)
Reality check: Between 1981 and 1998, when the stock market was averaging annual returns of almost 13 percent, this figure seemed conservative. Since then, the stock market has seen the bursting of the dot-com bubble, followed by a second crash in 2008, and the drop we’re even now enduring. According to some experts, the stock market may return as little as 4.5 percent annually going forward.

5. To determine the percentage of stocks you should have in your portfolio, subtract your age from 100.

You may also believe: Placing a bed facing north-south brings misfortune.
Reality check: According to CNN Money, because of longer life expectancies, this number may not be aggressive enough. Instead they recommend subtracting your age from 110, or even 120.

6. Never buy a house that costs more than three times your annual income.

You may also believe: Any ship that sails on Friday will have bad luck.
Reality check: When I bought my last house in 1997, I paid roughly four times my annual income. It was tough for a while, but not impossible by any stretch. A broader, but much better, benchmark to follow is to make sure the ratio of all of your monthly debt payments to your gross monthly income does not exceed 36 percent.

7. You should close any credit accounts you no longer use.

You may also believe : Dreaming of a lizard is a sure sign that you have a secret enemy.
Reality check: Credit card companies see long-held accounts – especially those lacking negative reports – as proof of credit responsibility. Because a portion of your credit score is determined by your borrowing history, as well as the ratio between the balances on those cards and your total available credit, it’s often wiser to keep your unused credit accounts open.

8. When planning for retirement, anticipate replacing 80 percent of your pre-retirement income.

You may also believe : The spouse who falls asleep first on their wedding day will also be the first to die.
Reality check: The problem with this rule of thumb is that it assumes expenses will stay the same in retirement, when for most people, nothing could be further from the truth. For example, kids move away, and people may pay off their mortgage and/or downsize to a smaller home. For many reasons many retirees will spend far less than they did in their working years.

9. To quickly figure a server’s tip, double the first digit of the bill’s total. If the bill is $100 or more, double the first two digits.

You may also believe : If you say goodbye to a friend on a bridge, you’ll never see each other again.
Reality check: The standard tip for good restaurant service has been 15 percent for decades. Well, that’s until tip inflation once again reared its ugly head. If you’re not careful, following this rule could result in an overly generous tip.

10. Your minimum net worth at any given age should be your age multiplied by your pre-tax annual income, with the result divided by 10.

You may also believe : Salty soup is a sign that the cook is in love.
Reality check: Never mind that this formula has many flaws. Net worth is just a snapshot in time that serves very little purpose, unless you plan on liquidating all your assets. In fact, in the grand scheme of things, the annual change in one’s net worth is a much more important indicator of financial health. Yes, folks, even more important than an itchy palm.

View this article on MoneyTalksNews.com

Smart Investing
Apply Today for a loan
Lenders Commercial Finance

By Len Penzo | Money Talks News – Tue, Nov 6, 2012 1:43 AM EST







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Invoice Discounting with Lenders Commercial Finance

How does Invoice Discounting with Lenders Commercial Finance differ from other business financing arrangements?

Unlike traditional bank financing (where the focus is on clearing very specific financial hurdles), the focus with Invoice Discounting is the strength of your business model and the creditworthiness of your buyers.

Unlike traditional accounts receivable factoring where the factor takes over your accounts receivable, with Invoice Discounting by Lenders Commercial Finance you remain in control of your customer relationships.

How does Invoice Discounting work?

Once we establish an “Invoice Discounting Line Of Credit” for your company we partner with you in establishing Invoice Discounting Limits for each of your buyers. You submit the invoices you wish to finance via our secure internet-based invoice management system. Invoices representing goods that have been delivered or work that has been completed are funded within 24 hours by wire to your account.

How much do I receive for my discounted invoices?

We typically advance 90% of the net invoice amount up front and the balance when the invoice is collected.

Do I have to discount all my invoices?

No. We want to give you as much flexibility as possible in managing your cash flow. Not all buyers need to be discounted. You can hold invoices on buyers approved for discounting up to 10 days after delivery of goods (or work completion).

Can I payoff discounted invoices before they are collected?

Yes. You can “buy back” all or any part of your discounted invoices at any time and for any reason.

Is it expensive to discount my invoices?

We take a normal trade discount when you receive funding (typically 1% for each 10 days on original credit terms). Invoices that pay beyond terms are charged a convenient daily rate. The cost is higher than with bank financing but is in line with industry accepted trade discounts and discounts paid on credit card transactions.

Are charges based on the total invoice value or on the amount advanced?

With Lenders Commercial Finance all charges are based on the actual amount advanced to you. Other than pass-through wiring fees, there are no hidden fees or add-on costs as with most other financing programs.

Who is a good candidate for a Lenders Commercial Finance line of credit?

If you are a small or mid-market business (SMB) with B2B trade A/R you can use your assets to qualify with LCF. You can generate funding now to grow your business, pay down other loans or obligations, and to take advantage of new business opportunities. 

New Mailing Piece

Looking for asset-based lending for the Entrepreneurial spirit?

Subscribe to our mailing list, to find out how we can assist to turn on your cash flow

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Make sure to use Mail Chimp for your online Marketing, you'll go bananas.

Finding Capital

Finding Capital

Understanding Asset-Based Lending

For businesses seeking working capital to run their operations effectively and to finance growth, asset-based lending may be an excellent solution.

In its simplest form, asset0based lending involved a loan or line of credit secured by business assets under which the financial institution will advance funds based on a formula. The formula is usually a percentage of the current value of the  eligible assets. The assets usually consist of the borrower's accounts receivable and inventory, but sometimes other assets may be used. The advance percentage will depend on the assets being pledged. For accounts receivable and inventory, the percentage will typically range between 75 to 85 percent and 25 to 60 percent, respectively, and each is subject to certain eligibility criteria. A lender will usually conduct periodic audits to determine the  current value and eligibility of the assets. In addition, borrowers typically are required to provide a lender with various reports, such as accounts receivable agings and inventory valuations.

 Asset-based lending typically provides a low interest rate and favorable repayment terms. For the most part, asset-based lending is typically structured as a revolving line of credit that businesses can draw upon when needed, allowing them to avoid making fixed payments of principal and interest and incurring unnecessary interest. Because of the nature of asset-based lending, business usually use such loans for day-to-day cash flow needs rather than for purchases with a set dollar amount, such as equipment or other property.

It is important to bear in mind that a business must maintain the value and eligibility of each asset to ensure that it remains available for financing under the advance formula. For example, in the case of accounts receivable, the receivables in an account which remain unpaid after a certain period become ineligible for financing.

"Borrowers also need to make sure they are getting the maximum amount of advance they can get on the asset," says Barry Sloane, CEO of Newtek, a company that provides business services to small and medium-sized companies throughout the United States. "They should be aware of market rates or consult with an a experienced adviser."

Most small or medium-sized businesses can benefit from asset-based lending as long as they have appropriate assets to secure the loan or line of credit. Before approaching al lending institution, business should be prepared to provide two to three years of financial statement as well as business projections for the next tow to three years. It is recommended that a business also hire legal counsel with experience in asset- based lending to assist in negotiating the terms and structure of the transaction. Obtaining financing typically takes about 45 to 60 days, so businesses should apply to their financial institution as soon as they know they are going to need it.

Aset-based lending can be an effective tool for a growing business.

"The most important aspects for the borrower are negotiating the advance and the interest rates," he says. "OTher than that, the most important thing is making sure the asset is not impaired."

This article was supplied by City National Bank

Be sure to ask us about your Accounts Receivable Financing

The Fickle Financeer: Finding Clientelle for Factoring...

The Fickle Financeer: Finding Clientelle for Factoring...: So you thought about opening up a small-time or a fully operational factoring business, well where do I start? This may not be everyone's ...

Finding Clientelle for Factoring...

So you thought about opening up a small-time or a fully operational factoring business, well where do I start?

This may not be everyone's cup of tea, but there are many options that can be helpful towards finding people.

Some exploratory options may be:

• Word of Mouth
• Snail Mail
• Email
• Email Blasts
• Social Media
• Directories
• Classifieds
• CraigsList

Now you may say, well thanks for the info Captain Obvious, but how do I go about doing this?

Since this can be a timely matter, I will make a multi-post piece out of this story.

For now, we can start with Word of Mouth and Snail Mail.

So you are trying to find some new clientele, start with the basics of K.I.S.S.

Keep It Simple Stupid.

Talk to your friends, relatives, businesses, forums, anything that may help you in the local neighborhood. Some of the tricks I have learned to get into the local business flow is to find social clubs. Whether it be the Elks Club, Rotary Club, AmVets, VFWs, Church Groups, Business Groups (check restaurants, coffee shops, grocery stores,  for flyers), local smalltown papers, community websites, sporting leagues. These are all viable options to talk to people who are local that may own, or work for a company that uses asset-based  loans for buying their receivables. Never be afraid to ask, or to get some feelers out when looking for business.

The second topic was Snail Mail, it may be a dying art, but a bulk mailing still shows a personal, physical touch in business. Visit a website like GotPrint? , Overnight Prints , PS Print and get some postcards, flyers, or anything that you want made. It is cheap, easy, and efficient. Never be afraid to send a mailing, it may cost more than an email, but someone has to actually pick up the mailing.

We can continue this on another post, if you have any questions, feel free to ask. I am always open to suggestions about what to write about, or how I am writing.

Until Next Time

Factor ya later.

Cheap Debt Investment

A great article pulled from CEO.com


Although the subject matter below is based on real-world experience, all characters, figures, and settings are fictitious and are not based on the financial situation or strategy of any specific company.
From: CFO, Any U.S. Investment-Grade Company
To: Treasurer
Priority: High
Subject: Anything we can do to take advantage of such low borrowing costs?
From: Treasurer
To: CFO
Priority: High
Subject: Re: Anything we can do to take advantage of such low borrowing costs?
Good Morning, Boss:
I am almost certain that borrowing costs for investment-grade companies have NEVER been lower. I have maxed out the most reliable data sources and cannot find a time when U.S. corporations could issue debt at lower interest rates. Thedriving force behind this low-rate environment is investor demand for both yield and safety.
Investment-grade debt has become the best game in town for investors, as it offers reasonable safety and return at a time when the stock market is one bad headline away from a crash and U.S. Treasuries offer paltry yields. This high demand for quality corporate paper, combined with such low Treasury rates, has greatly compressed corporate credit spreads, pushing all-in bond coupons to unprecedented levels (bond coupons = reference Treasury rate + corporate credit spread).
So, without further delay, I give you five great ways to take advantage of cheap debt:
Capital expenditures. It may seem like the global economy is doomed forever but we should be optimistic. Now is the time to open that new plant, purchase that new fleet, and develop that new product. We can borrow at 2%, 3%, or 5% for 5, 10, or 30 years, respectively. Let’s reinvest in the business in anticipation of better times; when demand returns, we will be thanking ourselves for recognizing and seizing a great opportunity.
Acquisitions. Another great way to invest in our business is via acquisition. Let’s go after those targets we have been eyeballing the past few years. We can justify paying a full valuation with the low hurdle rate set by borrowing costs. While other companies sit on the sidelines and wait for Congress to save the economy, or destroy it, we can be proactive in growing our business.
Pension contributions.Defined-benefit pension plans remain grossly underfunded. Falling discount rates and government regulation have created the perfect storm, inflating pension liabilities so much that pension asset returns have no chance of closing the gap. By issuing low-cost debt and contributing the proceeds to pension assets, we can finally catch up and get our funded status closer to 100%. As an added bonus, a debt-financed pension contribution is both tax deductible and leverage neutral (rating agencies treat unfunded pension liabilities as debt).
Share repurchases. With very low leverage and anxious shareholders, now would be a great time to send a bullish signal by issuing debt to repurchase shares. First, a debt-financed share buyback is accretive to stock price and earnings. Using debt costing 2% after tax to take out equity costing more than 10% (required return + dividend), we can reduce our cost of capital, potentially increasing the value of the company. Also, fewer shares outstanding means an earnings-per-share boost at the end of the year. Second, such a bold move of using debt to repurchase shares sends a very strong message to the market that our shares are undervalued. Third, with looming tax increases on capital gains, now would be a good time to offer shareholders a way out at a 15% capital-gains tax rate. That rate can only go higher next year.
Prepaying future cash dividends. Tax increases on dividends are also looming, with the upcoming expiration of the Bush Tax Cuts at the end of this year. Congress’s failure to act, a high probability, will result in the tax on dividends moving from 15% to more than 40% in some cases.
We can do our shareholders a big financial favor now by borrowing to prepay the dividend for the next two years, helping them avoid a much higher potential tax bill. So instead of paying our shareholders the annual dividend of $2.00 per share, we would pay a $6.00 dividend this year. The incremental $4.00 today would be taxed at 15% and net the shareholder $3.40 per share. Paying the $2.00 dividend the next two years would net the shareholder only $2.40 per share should the dividend tax go up to 40%.
It is important to mention that this environment will not last forever and we will regret not taking advantage of this opportunity someday soon. Interest rates will reverse course, and when they do, the moves will be quick and significant.
The Treasurer
Patrick Guido is vice president and treasurer of publicly held VF Corp., a $10 billion global apparel and footwear company with brands that include The North Face®, Vans®, and Timberland®. Patrick has more than 17 years of experience in corporate finance. He earned an undergraduate degree from Georgetown University and an MBA from Vanderbilt University.
CFO.com (http://s.tt/1r5DS)


Business Line of Credit for Entrepreneurs

Brick and Mortar, Pen and Paper

If you are trying, as I am, to learn the trade of factoring and purchasing accounts receivable, this book and website may be of help to you.

Fundamentals for Factors

Also, if you have questions, check out the opportunities and concepts we use at Lenders Commercial Finance:

Commercial Financing

Feel free to ask questions, or post things that you have found helpful.

Fund ya later!

The Factoring "Lock Box"

As the eyes and ears for a Factoring/Financing company, it is interesting to be involved and surrounded by new terminology, as it is in any industry.

My quandary today was, when involved in a conference call, describing a factoring "lock box" through the financing bank.

Here was the dilemma:
This certain company is working on a contract with us involving buying their accounts receivable. The clients were worried that their customers would know they would be going through a secondary finance company, that is fronting them money.

Here is where I would like to interject. Factoring happens to be one of the oldest and most basic forms of getting financing outside of a bank. It has been used for centuries, if it were not for factoring, there would not be clothing on your back, because that is how the garment industries were started. It is a widely known, and widely used option to small and large business owners. Try to find an industry that is retail or sells a good that does not use some sort of commercial financing or factoring. So in summation to my soap box rant, there should not be any worries about someone knowing that you have a factor buying your receivables.

Back to the story...

As we were in the midst of this conference call, my superior was trying to explain this fraud deterring system called a "lock box." If you are in the industry, you would know that one of the 4 most common forms of fraud that is committed is when a client does not submit, or notify the factoring company of an invoice that the creditor had already purchased.

My superior did an excellent job to avoiding the "F" word, (keep your mind out of the gutter, I mean fraud,) and told them how that it is merely a process to show verification to us and the bank that your checks are coming through and that the money you had promised is not being lost in translation.

To put it shortly, a "lock box," is a system that all checks are placed into, a photo is taken, and so that all parties involved can see what and where money is being handled, and sent to, as a safety precaution for the money that is being loaned.

I would advise doing a google search and finding websites such as:

http://www.investopedia.com/

or

http://money.cnn.com/services/glossary/a.html

to learn some new vocabulary, and find a new word of the day.



Factor ya later!

http://www.lenderscf.com
Asset-Based Loans to Grow By

Talking about, thinking about, and understanding the life of a hybrid Finance/Factoring Company

This blog will let people understand and begin to comprehend the other side of financing and factoring, where you are dealing with real people, and not just a bank.

A little about our company, and the men that started it:

Steve Tarpley and Ken Wilkens have started three successful small businesses over the last 21 years. They founded NEWCAL Industries in 1991, and grew it into one of the top ten office equipment dealers in the nation. In 2008 NEWCAL was acquired by one of the world's largest office equipment manufacturers.

Steve and Ken understand small business - they are intimately familiar with both the joys and challenges of building and managing a successful business. There were many stages along their path to success that required creative ways to fund growth.

Discounting their commercial invoices was one of the tools they utilized while building their businesses. It helped them hit some of their major milestones. They formed Lenders Commercial Finance to help other small and emerging California businesses fund expansions & growth, bringing Cal McGinnis on board to run their day to day operations. Cal has over 30 years of experience working with small businesses; both as a commercial banker and as a trade credit specialist.

You too can take advantage of this important tool to unlock the cash flow tied up in your accounts receivable. Invoice discounting with LCF works much like an accounts receivable “payment-in-kind” bank line of credit. Collections pay down your line and new invoices allow you to draw upon your line. Our goals are to help you obtain the working capital you need, when you need it.

http://www.lenderscf.com