What Mom Didn’t Teach You About Working Capital Business Financing

If you’re like most of us Mom never really gave us a lot of advice on working capital! That’s why for such an important business financing subject we recently wrote on an older article in Canadian Business magazine that covered a total of 15 – yes that’s 15 ways) to finance your business. Perhaps these were the secrets of the Holy Grail that Mom never taught us, we thought?

The reality was that we had some strong comments and additional information on those 15 items, and we commented on 7 of them in the last article. Let’s cover off those final items and hopefully get some real value on what Mom never told us about these things!

Under the category of ‘ government programs’ the article talked about various federal and provincial programs or initiatives for business financing. Mentioned was the Community Futures program as well as the Canadian Youth Business Foundation. These are very narrow and segmented programs, in the case of the Youth Foundation, guess what, you have to be a youth, which hardly suits most business owner’s.Community Futures programs have tended to be rural in nature, have ad minimal funding allocated to them, and seem to have focused primarily on start ups that might generate employment.

Secondly, Mezzanine debt was referenced. This is of course essentially an unsecured cash f low loan provided by private finance firms. In many cases it focuses solely on cash flow as the repayment vehicle. The bad news on mezzanine debt is that it typically is available for transactions in excess of 5 Million dollars, which certainly doesn’t work for most small and medium business owner’s.For the record mezzanine financing rates are in the low to mid teens.

Private equity was out third source of capital. Typically these funds are provided by niche Canadian and U.S. private firms who focus on equity and convertible financing instruments that force the business owner to give up partial ownership.This isn’t necessarily a bad thing if you get the working capital and business financing that you need, but you should absolutely be prepared to give up some ownership on these transactions, which are often quite substantial and take several months, if not longer, to complete.

Hey, let’s go public and have access to unlimited sources of capital. That’s the typical pitch made to Canadian corporations who consider this type of financing. The reality is that a true IPO listing on the TSX or Venture exchange in Canada requires a significant capitalization and track record. Ownership becomes diluted, and companies are forced into very strong levels of reporting and disclosure. Many of our clients have ‘ gone public’ via reverse take overs of shell companies that had a listing, we have never seen this work satisfactorily, at least from a viewpoint of giving them unlimited working capital.

The Canadian Business article focused on the federal SRED program. Finally! A good one! An absolutely great program that provides billions of Dollars of capital for any firm in Canada that qualifies for research spending and adheres to the program guidelines. Sred claims can also be financed, similar to a receivable, as soon as they are filed, that supercharges the program even more from a working capital perspective.

VC money is often bandied about and sought by many corporations. Venture capital in Canada is struggling in the 2010 environment, any fundings seem to be going to firms that have been previously funded, and are getting additional capital (to stay alive?). Any Venture capital firm expects a high rate of return relative to the risk they are taking in financing your firm on an equity basis – in fact traditionally, as the article stated, the venture capitalists are looking for a 5 times return. Unfortunately for many Canadian business owners these types of fundings go to the sexier industry segments such as biotechnology, high tech, etc.

Well, that’s it. Hopefully we haven’t sounded too negative, but the general trend clearly are that the ‘ 15 ‘ options outlined in the original C B article clearly need to be grounded in a bit more reality for the average Canadian business owner and financial manager seeking capital. Speak to a trusted, credible and experienced business financing advisor who can provide you with an up to date realistic alternative on business funding.

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Capital vs Financing

Many aspiring entrepreneurs are misled into pursuing a capital investment without taking into account financing, which is the key component that gives your company its ability to grow. Say you are in a product driven business and you are looking for a million dollars for your initial cost of goods, your selling expenses, and all of your general & administrative expenses (i.e. salaries, office space, telephones, utilities, etc). For arguments sake, let’s say your cost of goods allows you to make $500,000 dollars in product with a respectable thirty percent margin. Let’s take it a step further and say your pursuit of the investment was successful and you have your million dollars.

And just to put the icing on the cake, let’s further say that your product sells well and you make that thirty percent margin, translating into $150,000 profit on that first order. Sounds great! But wait a minute. What happens when your customers come back and now re-order $5,000,000 dollars in product because your sales were so good? Who’s going to come up with the money now to finance $5,000,000 in sales? You can’t go to back to your investors and quickly try to convince them into exposing themselves with further capital, because that simply wasn’t the deal. And a deal is a deal. Plus it will scare them away.

What you need is a financing entity to fulfill your orders because that’s what they do. They charge you an interest rate to finance your orders up front. Not inject capital, that’s for the other guys. However, financing purchase orders up front (purchase order financing) is a dangerous business because the financing entity doesn’t have a guarantee that the goods will be made properly, if you’ll ship late, etc. For this reason, they will charge you a very high interest rate that will eat away your margins. If, however, you had the money to manufacture the goods and simply needed interim cash before the customer pays, that is much easier and attainable through a factoring company, who is similar to a bank but specializing in these types of transactions.

This is called accounts receivable financing, which you can get at a very respectable interest rate, because you have taken the manufacturing risk away, and then it becomes their job to check the credit of the customer to decide whether or not they are worthy of a credit line for the order. But that’s a mute point because you don’t have the money to manufacture the goods (it will take a lot more than your $150,000 profit), so you are stuck in the mud. So now what? Without the financing in place, you will be unable to grow and the investment you secured will be useless if you don’t have the fuel to go forward. Think of it as the investors bought you your car, but you need fuel for it to move. Financing is the fuel that keeps your engine running, and the more fuel you have, the farther you can travel.

So how are you going to get purchase order financing at an interest rate that doesn’t swallow all your profits? Certainly not from a bank in this day and age. This is where forming strategic alliances come in which I will fully discuss in detail in my next article. To give you an idea what a strategic alliance is, it is where go to manufacturers in your industry who are already doing what you are doing and look for your financing there, because they can control risk by making the product in their own factories, so your interest will be much lower.

The best possible scenario however, and your most probable, will be that you kill two birds with one stone and get both the investment and financing all under one roof. Bottom line, they are doing what you are doing and they are succeeding so why wouldn’t they? Most of these companies have a built in turn-key model that makes it infinitely easier to create a successful business model. But don’t think you’re going to hold on to all your equity. Anyone that does, doesn’t understand that 20% of something is worth a heck of a lot more than 100% of nothing.

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Capital Budget Financing

Capital budgeting is the process of calculating whether or not an financial investment is rewarding. Often business owners will have several chances and must estimate each one’s potential in order to make assessment and choose just one or a very few. For instance, a business might be trying to conclude whether to buy new goods to expand manufacturing capacity on an existing product, or to invest in research and development for a new service. The three main techniques of taking this measuring are Net Present Value (NPV), Internal Rate of Return (IRR) and Payback Period.

Capital budgets Finance are the long-term budgets that bolster building conditions. Capital budget items require a new kind of thinking of finance because the expenditures are uncommon and not familiar. Capital budgets allow more scope and evaluation. You have to power your building working expense, but you don’t have to swap the roof capital expenditure.

IRR
Internal Rate of Reciprocate is a percent very similar to the interest rates, and is used to analyze a capital investment versus to other kinds of financial investment. Divide the assumed profit by the expected costs, and you’ll arrive at a percent of returns. Then look at the company’s other works and determine the minimal acceptable percentage of return; this is called the hurdle rate. If the IRR is high than the hurdle rate, the project is worth seeking. The IRR is easy to comprehend, and is thus the most famously used technique, though the NPV is more realistic.

NPV
Net Present Value, or NPV, combines two tactics of value. First, it pinpoints how much money will flow in as a result of the financial investment, and analyzes that against the money that will flow out in order to make the investment. Since these kind of flows take place over a moment, and often the investment will pay back much later, we also take into account the current and long-term value of money. Because of rising prices, money accumulated in the future is worth less in present moment than the same amount would be now. Therefore, NPV calculates all of those inflows and outflows over time, takes ostentation and foreign trading rates into account, and articulates the final benefit to the company in terms of today’s hard cash.

Multiple Techniques
Most companies use multiple techniques for all of their capital budgeting judgments. There are a number of minor techniques, such as revenues index and sensitivity researching, which can also be applied in making decisions. Since each strategy looks at the financial investment from a different perspective, it is best to employ several analyses and take the opportunities with the safest return in accordance to all techniques.

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Is a Capital One Business Credit Card Right For You

When securing the right kind of financing, both start up and ongoing, you want your business to be one that becomes and remains successful. Oftentimes, start up funding is achieved by seeking bank loans or funding from venture capitalists. However, once that initial funding has dried up, relying on small business credit cards to get you and your company through lean times can help you make large capital purchases when the need arises. Besides providing timely infusions of purchasing power, the Capital One Business Credit Card may have numerous other benefits that entrepreneurs can use to their advantage.

Key Advantages of the Capital One Business Credit Card

Itemized Monthly Statements (paper summaries/online summaries)
Easier to keep business and personal expenses separated
Rewards for using your Capital One Business Credit Card
No need to carry cash, balance or write checks
Gives an added security to your business

There are a number of factors you want to consider when determining if a Capital One Business Card is right for you.

Things to consider when choosing a Capital One Business Credit Card

Introductory Annual Percentage Rate (Intro APR) i.e. 0% on purchases; balance transfers
Into APR Period (How long does it last? i.e. until February 2010)
Regular APR (i.e. as low as 13.24%)
Annual Fee (i.e. free for the first year; $39 annual each year thereafter)
Balance Transfers (yes or no; what is the percentage on the balance transfers; i.e. 3%; is there a limit on balance transfers annually? i.e. 1-3 balance transfers annually)
Credit needed to obtain the card (Fair, Good, Excellent)

Most business owners are concerned with what rewards is available when searching for those cards. Does it offer one or more of the following:

Reward features and bonuses

1% cash back
25% annual cash back
bonuses on cash earnings such as airline travel, gas purchases; points accumulated from purchases on items such as:

Building and hardware
Computers and Electronics
Office Supplies and Furniture
Advertising and Shipping

Things to remember when choosing a Capital One Business Credit Card

Always remember to read all of the fine print
Compare cards; not all have the same benefits
Choose wisely; pick the best that is most suitable for your business need (may take some careful evaluation of your business expenses)

All of these are the key factors that you should be concerned with when you choose to apply for it. As you can see having a Capital One Business Credit Card is very beneficial to your business.

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Working Capital Business Financing Sources

Working Capital business financing is never a question of why – it’s just simply a matter of when! Working capital and cash flow are of course the heart of every business. The challenges of obtaining that financing become a question of time.

Perhaps you need cash for for your regular ongoing business cycle – that’s the simple one – you buy inventory, your produce things, you sell, bill and collect. In a perfect world your suppliers give you unlimited time to pay, and unlimited credit limits. And of course your customers pay you in exactly 30 days. Guess what? It’s not a perfect world!

If you are a traditionally financed firm you have access to bank capital for revolving credit lines based on your business needs. But for a growing number of Canadian firms that access to traditional bank capital is not available. Those scenarios require a special expertise in identifying sources of business financing that work for you. The solutions actually are quite numerous – its becomes a questions of which solution works for your firm, what are the costs involved, and does the solution fit within your business model.

The business financing we are talking about can take many different forms – it might include an asset based line of credit, inventory financing or purchase order financing, a sale leaseback on unencumbered assets,, working capital term loans, or accounts receivable financing, otherwise known as factoring.

One of the most important things you can do for business financing is to ensure that the type of financing you source matches your needs. What we mean by that is that you should match short term needs with short term financing. Factoring might be a good example. If your receivables aren’t financed, and you need cash to meet inventory and supplier commitments that type of financing is immediate and addresses your needs. Why would you enter into a five year term loan at fixed payments for a short term capital need or requirement?

The best way to think of short term financing is to focus on the current assets part of your balance sheet – those items include inventory and accounts receivable typically. Those assets can quickly be monetized into a working capital facility that comes in a variety methods. The reality is that your inventory and accounts receivable grow lock step to your sales and your ability to finance them on an ongoing basis will give you access to, in essence, unlimited working capital.

There are some solid technical rules of them around how you can generate positive pricing for operating facilities. By calculating and analyzing some basic financial ratios (we call them relationships) in your financial statements you can get a strong sense of whats available in working capital business financing and what pricing might be involved. Those ratios are your current ratio, your inventory turns, your receivables turns or days sales outstanding, a, and your overall debt to worth ratio. Depending on where those final ratio calculations come in will ultimately allow your working capital financier to put your firm in a low risk, medium risk, or high risk band of pricing?

In Canada working capital rates range from 8-9% per annum to 1-2% per month, depending on what assets are financed and how they are financed.

So whats our bottom line in working capital business financing? It is simply there are alternatives available and you as a business owner of financial manager can assess those alternatives in terms of short term needs or long term needs. Pricing and solutions vary, and your ability to convey the positive aspects of your business to the working capital lender will ultimately lead to a final pricing and solution. Speak to a credible, experienced and trusted working capital business financing advisor to determine what solutions are the best for your firm.

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Chiropractor – A Health Care Invention

A chiropractor is defined as a health care device with a professional touch for the diagnosis and intensive treatment of neuromuscular disorders. Their emphasis is on neuromuscular disorders, especially spine.

Most of the chiropractors are used as a pain reliever for the patients. That is why it has been given the title of being an alternative medicine to the subjected treatment.

Chiropractors firmly and honestly believe in the kind of relationship that developed between our nervous system and spine, this does not come as a surprise as we have already mentioned that the major area of focus for the chiropractor is the spine.

Here is the listing of few of the benefits received from Chiropractic health care

1. A great boost for stress reliever

It is a well known fact that too much of stress will always result in a bad outcome. Neither is it good for health nor is it good for our well being. When our nervous system moves out a bit from the track and our skeletal system seems to have shaken off from their proper position, there are very high possibilities that your entire body will feel out of balance as well. This is what will lead to stress in your entire functioning of the body. Here is when the functioning of a Chiropractor comes into use. It helps in balancing that stress and your body is immediately made to come back to its normal balance. Once you are made to adjust to this functioning you will feel much more equipped to manage this stress if it happens to arise again.

2. Posture perfection by Chiropractor usage

By using this chiropractor over a considerable period of time, these chiropractor adjustments can help in the alignments of the spine and brings a noticeable change in your posture. This is distinctly helpful when it comes to aligning the curve on your neck. As soon as you get into your working in an office phase, you have to spend hours after hours in front of a computer. Due to this from a very young age, people are seen to be having neck issues. If you continue a regular and dutifully maintained use of the chiropractor, you can improve your body posture in no time.

3. Moods are taken care of automatically

When with time your body gets adjusted with the working procedure of the chiropractor, your entire body gets balanced. The entire chemistry of the body is brought back on track. A lot of people who have not had the best of luck in chemical balance gain a lot from the chiropractic care. Depression which is a very serious mental condition also sees an immense improvement in the moods of the sufferer. So you see how a chiropractor is creating wonders in your mood related cases as well which are in a way related to the functioning of your entire body.

Thus we provide you with a gist of all that you can mainly expect from the usage of a chiropractor. It is efficient and it is useful and it is interlinked with many a thing’s improvement.

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Calamine Lotion Benefits

Calamine lotion has been around for a long time and was always used in the medical environment. Obviously, it isn’t as strong as most antiseptic chemicals but it is a lotion that prevents itching.

Calamine lotion can be used for various treatments which include damaged and itchy skin. When skin gets damaged it will get itchy because the cells are breaking and tearing apart. It may sound painful but the itch is what really gets to you. And who can resist scratching an itch?

Coming into contact with poisonous plants is common when camping or spending the day in a garden. These are plants that use poison as a self defence mechanism to save themselves from being cut or eaten. It’s also important to know your allergies as some people may have allergic reactions to certain plants. The calamine lotion can help to soothe the burning feeling and prevents any breakouts at the same time. This will help heal the rash and infection quicker in a painless way.

Baby skin is very sensitive to most surfaces including their nappies. The calamine lotion can help to heal the nappy rash or anything of the sort without burning your child’s skin. Keeping the rash as soothed as possible will make your child more comfortable.

Insect bites are common in any area of the world. These bites could also be slightly poisonous (in certain cases) which causes itching and inflation on the skin. Applying calamine lotion to the bite will soothe the wound and assist with the process of ridding the body of the harmless poison. Please remember that certain insects can also be dangerously poisonous and you should be aware of which insects and spiders can harm you greatly. Most insects that have many bright colours are often associated with high toxic levels.

Calamine lotion also assists with stretch marks and broken skin that occurs during pregnancy. There is nothing worse than having discomfort during pregnancy especially if it could be treated or prevented. Adding calamine lotion to your broken and itchy skin relieves the surface of the discomfort.

You can also apply it to other skin problems such as acne, dryness, eczema, psoriasis and as a normal moisturiser to improve complexion and quality of skin.

Calamine lotion can be found in most stores or in bulk quantities at cash and carry wholesale stores. If skin problems continue after the use of any treatments, there is a chance that your body is unable to cure itself of the infection. In such cases you would need to consult a dermatologist to find out the cause of the problem.

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Staying Safe While Behind The Wheel

There is nothing quite like being able to hit the road and experience a level of freedom in your own vehicle. While your car can offer you a chance to escape from the monotonous routine of your daily life, it is also important to keep basic maintenance in the forefront of your mind. When something goes wrong with your ride, it can lead to some serious financial problems and general frustration. In fact, you might discover that some aspects of maintenance are less obvious than others. This is especially true of areas like windshield glare.

When you are driving on a particularly sunny day, you might not be able to see the road in front of you. The sun can be harsh and unforgiving, and this can have a huge impact on your ability to see clearly while you’re driving. Instead of chalking this up to the way that it is, you might want to take action and discover the right solutions with Crystal Fusion Technologies. Explore the different ways to improve your driving experience and learn how to stay safe while you’re behind the wheel.

A Frustrating Glare

Sunlight on the windshield can be a serious threat. A sunny day is perfect for going to the beach, having a lazy picnic in the park, or simply soaking up some rays. Unfortunately, the sun is also incredibly bright at certain times during the year. When light bounces off or gets filtered through the glass on your windshield, it creates an obstruction that cannot be easily remedied. While you might try and put on some shades, you’ll discover that this solution only gets you so far. A real remedy is in order for a lasting fix.

Companies like Crystal Fusion Technologies have put a lot of time and energy into crafting solutions that aim to improve this situation. Cutting the glare on your windshield is not an easy task and you need to make sure that you are taking the right steps to see improved results. With the assistance of the best products on the market, you can use cutting edge technology to divert the rays of the sun in a way that does not upset your driving in the slightest. Research your options to discover the perfect fit.

Driving On

Staying safe while on the road is important for many reasons. People tend to go through routine maintenance for their vehicles to ensure that no unforeseen issues arise while behind the wheel. This usually takes care of areas like oil changes, tire rotations, and other important areas. Still, maintenance neglects issues that are inherent by design. Windshield glare cannot be fixed with regular maintenance. You need to go above and beyond to protect yourself when you’re on the road so be sure to look over your options.

There are many ways to protect yourself when you’re out driving in your car. When you are paying attention to all angles of your experience, it can be a lot easier for you to spot a problem in advance. Learn about how products by Crystal Fusion Technologies might be able to improve your experience by using windshield protective coating regards to windshield glare. Explore your options and you can find the best solution for your troubles.

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Various Health Benefits of Meditation

The ancient practice of meditation is gaining popularity again in modern times. As this practice goes main stream, more and more people are enjoying its benefits. Derived from the Sanskrit word ‘Dhyana’ meditation means attention and contemplation. It is a practice to help focusing the attention away from everything to achieve a relaxed state of peace and balance. This practice is designed to promote relaxation, develop love, patience and compassion and build internal energy to overcome stressful situations.

One of the reasons for growing popularity of meditation is the scientific research proving its amazing range of benefits and healing properties. It helps a person increase his focus, eliminate negative thoughts and anxiety. Here are some of the popular health benefits of meditation:

- Reduces Stress – Stress is the most common problem of people in present times. Meditation induces a state of relaxation which is helpful in reducing stress and anxiety levels. It restores the emotional balance which will help in enhancing self-esteem, increase awareness and optimism.

- Deals with Chronic Pain – Meditation helps in reducing pain of patients suffering from chronic pain.

- Improves Sleep – It helps in improving sleep quality and cures the symptoms of amnesia.

- Improves Immunity – When the body is relaxed and stress free, the immune system is able to prepare itself to fight against various diseases.

- Provides relief from Blood Pressure and Heart Ailments – Simple daily practice of meditation can help in lowering blood pressure which will reduce the risk of hypertension. Over the time, the heart rate can also be lowered, improving the cardiovascular system. Research has proved that it has helped in managing heart diseases in many patients.

- Improves Concentration – It helps in increasing the strength and focus of your attention. It can help you think better and generate more new ideas.

- Generates Compassion – It can help to increase positive feelings and actions towards others. By practicing meditation, people learn to extend kindness and develop forgiveness.

- Helps in Fighting Addictions – The discipline developed through meditation helps in increasing self control, awareness and breaking dependencies. Research has shown that it helps people in redirecting attention, increase willpower and control impulses. It helps in developing discipline to avoid triggers for unwanted things and fight and recover from addiction.

The importance of meditation can be felt never like before in present times. With routines getting busier and more and more stressful, meditation is a good driving force that can help people cope up with the intricacies of modern lifestyle.

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Remove Unwanted Facial And Body Hair Using Laser Treatment

Removing unwanted hair is time-consuming and repetitive no matter what your preferred hair removal technique is, and whether you shave, pluck, wax, thread or use depilatory creams, the hair will always grow back. You’ll find the skin on your face is sensitive, and constantly using harsh hair removal treatments can cause a great deal of skin irritation.

All women have hair on the face, usually it’s fair and fine and is difficult to see, but those with darker hair are not so lucky. You will find that most of your female friends have the same issues when it comes to unwanted facial hair. The hair on the upper lip, chin, cheeks and sideburns can all be very embarrassing and cause you a great deal of insecurity. It seems that every time you think you’ve disposed of unwanted hair, you’ll find more of it sprouting up somewhere else, and even after you get rid of the hairs, they just grow back.

You can cover up your excess hair in areas that aren’t constantly exposed, but the hair on your face is always on display, and it can seem as though everyone is always looking at the hairs on your upper lip, chin or sideburns. A good way to get rid of unwanted hair is with laser hair removal.

Benefits of laser hair removal:

It permanently reduces hair safely
It’s a fast treatment time
The results will boost your self-confidence
Prevents razor bumps and irritation
Laser treatment causes only minimal discomfort
Laser energy gets absorbed by the pigment in the hair follicle, and this laser energy is then converted to heat, causing thermal damage to the follicle without harming the surrounding skin. This results in hair growth being stopped in the damaged follicle.
Generally for white skin you’ll need around 6 treatments, spaced 4-6 weeks apart, and this usually results in 80% of hair removal. Darker or black skin may need around 8 treatments, resulting again in 80% of hair removed.

Most clients experience minimal discomfort; some may experience a minor stinging or pinching sensation on the skin as we deliver the laser pulses, but we can offer topical anaesthetic cream to make treatments more comfortable.

Although we can perform laser hair removal treatment on white or black skin, lasers only work on hair which has pigment, because it absorbs the laser light and allows the heat to build up and diffuse throughout the follicle to destroy it. Therefore it’s not possible to treat white, grey, and blond hair by laser.

If you need help choosing a cosmetic procedure, we provide an extensive range of cosmetic procedures for the face and body: Botox, Vaser Lipo, Lip Augmentation, Dermal Fillers and many more treatments, to help create a younger, slimmer, more youthful looking you!

The Selston Cosmetic Clinic is located in Selston, Nottingham, where we offer a bespoke service with a personalised touch and deliver high client satisfaction. We have been involved in the cosmetic industry for over 10 years

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