Compound Profit Blog

Government Contracts Financing

Ready, Set, Go for those Government Contracts!

In the past year, construction companies across the country have seen many of their options dry up and are seeking new opportunities outside of their normal scope. There is a huge area of opportunity for small businesses in the government arena.  Many of these contracts give preference to the small local business owner / vendor.  Yes, there is a great deal of paperwork required, but the potential rewards can be very substantial.  As an alternative financing provider, Compound Profit may able to provide you with the backing you need to confidently go after these contracts.

First, we can help businesses seeking to provide finished products / equipment to the government (basically buy and resell items).   Our system of purchase order financing and factoring can support you in acquiring / delivering the products and then advancing you cash when you invoice the government.  We are also able to help with some of your government construction projects as well.

Additionally, we may be able to help you acquire the additional equipment you will need to fulfill your government contracts financing needs through our equipment lease financing – a service we may be able to provide through your regular vendors.  Rather than having a huge capital outlay for equipment, we provide funding that allows you to do monthly lease payments.  Your equipment vendor receives their payment quickly, many times half on ordering, with the remainder of cash on delivery of your equipment.  It’s a win-win situation for everyone involved.

Finally, sometimes the government wants assurance that you will have the funding available to fulfill the contract.  We can work with you on pre-approval for your contracts and provide you with documentation to indicate that you have adequate financing in place. 

Even better news – this process works with non-government contract bidding as well.  Christy Giroux, new Compound Profit of Arizona franchise owner and Regional Director, states, “As a small business owner and veteran, I’m reaching out to other small businesses to see how we can help them sustain and grow their businesses.  We want to increase their opportunities and profits.”

Christy A. Giroux - cgiroux@cprofit.com

AZ Principal / Regional Director

Compound Profit of Arizona

Cell:  520-909-7146

Office:  877-386-3716 ext. 249

Fax:  888-200-3379

Auto wraps advertising

As a company that finances auto wraps for advertising purposes, Compound Profit receives calls every week from the vehicle wrap vendors and from businesses that consider using vehicle wraps advertising and need financing options. 

Because of the turmoil in the banking systems now and the uncertainty in the economy, many banks that regularly made micro loans for the small business community in the past, are now declining those funding requests.

Compound Profit’s ProntoLease financing for vehicle wraps and other types of commercial signage fills a financing void and has become very popular with wrap shops and their customers.

We recently financed a vehicle wrap for a customer for one of our approved ProntoLease Vendors, Signs Now, in Fort Meyers, Florida.  The vendor owner, Udo Upeslacis, advises that the financing option provided by CProfit’s ProntoLease program helps him close vehicle wrap sales that he would otherwise lose. Signs Now is one of only six PDAA certified shops in Florida and the only PDAA shop in Southwest Florida.  If you are located in Southwest Florida and are in need of a quality vehicle wrap or other commercial signage, contact Udo at 239-277-0553.

Udo advises that… “Customers who want multiple wraps for their company vehicles often suffer sticker-shock and want financing options other than cash or credit cards.  The ProntoLease program allows them to finance their wraps with a single one-page application, no tax returns, no financials and no additional collateral. They can also enjoy tax advantages when they use the ProntoLease financing option.”

Based on the number of inquiries that Compound Profit receives from B2B owners who want to promote their goods and services, I believe that they are finding the vehicle wrap mode of advertising to be very productive.  The ProntoLease financing option allows them to take advantage of the many benefits of a vehicle wrap.

Compound Profit began offering lease-financing on vehicle wraps in 2008 and the demand has grown significantly. We advertise nationwide for vehicle wrap vendors / dealers and their customers who are seeking financing options other than cash or credit card. We pass along those leads to our approved ProntoLease wrap shop vendors across the country.

In summary, vehicle wrap vendors and their B2B customers find that this type of advertising offers a very good Return on Investment (ROI) when they can get short-term financing for their vehicle wraps for as little as $99.00 per month.

Robert Jacobs is an Account Executive with Compound Profit.  Mr. Jacobs helps small to medium size business owners get capital for growth and cash for operating expenses… when the bank has to say no. Visit his web site at http://www.cprofitrj.com  for more information.  He can also be reached at (877) 386-3716, ext 134.  Learn more about Compound Profit’s Smart Capital Advance solution for business owners and for bankers at http://www.smartcapitaladvance.com/jacobs

Business lending solutions

Business lending solutions – who can help?

I have heard the question asked lately “when will banks start lending to small businesses again like they used to”.  The answer I hear from many recognized experts on the subject is “probably never.”

Now before you cringe, stop and think about this for a minute.  During the bull markets of the 80s and 90s, when our economy was supposedly sound, money was relatively cheap and easy.  And while some may have seen these as the “glory days”, in truth it did nothing more than mask some bad decisions and practices by both borrowers and lenders.

We saw people pour money into the stock market without any thought as to the instruments they were buying.  The thought process was their money would continue to grow at ten to twenty per cent a year and their retirement strategy was built on this myth.

We all know how would be non qualified buyers actually obtained mortgages for homes they could not afford, putting nothing down and paying interest only.  How’s that working for us?

So it is easy to point at the banks today and say “see what you did”.  But the fact is there is plenty of blame to go around.  Just like an uneducated decision in personal investments for many had catastrophic outcomes, so too did the borrowing practices of many businesses.

Loans came easy and the more money one “needed” for their business the more they would get.  Business growing through the roof?  Take on more debt to pay for the inventory.  Your fleet of trucks not as shiny as they used to be?  Take out a loan and buy some more. Money was cheap and money was easy.

But were those the good old days?  Not at all! Today the business person must be calculating and intelligent about how he or she finances the business.  With banks lending practices significantly altered, the popularity of alternative financing is booming and financial instruments long overlooked are moving into the forefront.

Take AR factoring for example.  Often viewed as a tool for less successful or desperate businesses, now thriving companies are leveraging their invoices for growth.  By selling their receivables to a reputable third party for a discount, these businesses now have cash in hand to invest back into their business without taking on additional debt or selling a part of their business.  Born out of necessity, this practice is proving to be a far better alternative to high growth companies.

Leasing and micro-leasing is also becoming more and more prevalent. Businesses, in order to survive, are looking to protect their cash reserves.  By leasing equipment, signage, or any asset they can they are able to take full advantage of available third party money to grow their business.  Even if the rates are higher, if an investment in an asset shows a positive return (say a new truck) the prudent owner is leasing that product.  As long as the return on the investment is greater than the cost of the lease, it is a wise choice.

Of course positioning yourself properly is always the most important way to secure the financing you need.  Know your numbers, have your house in order, and be able to articulate your needs.  As a start up, try to keep six to eight thousand dollars in your account for six consecutive months to give lenders the confidence you can repay your debt. 

The bottom line is funders, as investors, do not want risk.  They want a guaranteed return on their money.  The better job you can do to assure them their investment in you is safe, the better you will be at attracting the financing you need for your business.

Alex Cherlin is a Cash Flow Expert with Compound Profit of Virginia. Contact him - acherlin@cprofit.com - for more information.

Small business loans stimulus

Small business loans stimulus – will it work?

There may be some relief in sight for small businesses across North America. If the U.S. Senate passes the Small Business Lending Bill, a 30 billion dollar fund will be allocated for small business loans stimulus. This will hopefully spur a rush of new lending inquiries from the small business community.

While funds may become available, there is no indication that the regulations imposed on banks recently are going to be eased. I spoke with a banker today about this, and he stated clearly, “No way”. These regulations have forced banks to look closely at every request for capital. Any minor issue a business owner might have could be cause for a rejection on the small business loan request. Thus, it does not appear that most small businesses will benefit from this move.

B2B Companies needing working capital should consider Accounts Receivable Factoring. It is a viable option that frees the business owner from the requirements of loans and lines of credit, and allows them to get the funds they need much sooner without the paperwork, loan committees, and delays. Requirements do not depend upon funds in the bank or the credit of the business or the owner; rather, the credit worthiness of the company’s creditors is the key to becoming fundable.

Accounts Receivable Factoring involves Compound Profit purchasing a company’s accounts receivable at a small discount. Funding occurs quickly; most of the time, the entire process can be completed and funds allocated within 10 business days. As part of the process, the creditworthiness of the company’s creditors is checked. As funding continues, Compound Profit will check creditor’s credit on an ongoing basis allowing the business owner to be the first to know if a creditor is having problems.

Following are some of the industries Compound Profit has provided working capital to through Accounts Receivable Factoring:

- Produce

- Graphic Design

- Cleaning                   

- Transportation

- Garment

- IT Service

- General Contracting

- Maintenance Supply

- Marketing Consultant

- Oil Field Service

- Import / Export

- Manufacturing

- Staffing 

If you own a company that does B2B or B2C commerce and want to know more about this powerful tool - accounts receivable factoring - that allows you to grow your business, you should consider calling us so we can get you the cash you need to radically change the trajectory of your business.

Doug Linder - dlinder@cprofit.com

Advisor / Principal - Compound Profit-Tampa Bay

877-386-3716   Ext 218

Commercial Financing Options

Can’t Get Approved for Commercial Financing?  You do have options…

Business Owners, regardless of whether their sales have grown or taken a downward slide, have been hit by the increasingly stringent underwriting policies of most banks and other lenders.  Creditors have found it difficult to approve businesses for credit amidst new and stricter banking regulations.  Even businesses that are financially stable, with good credit, and a long-term track record are finding their credit limits lowered and difficult stipulations added to other loan requests.

Business owners often do not realize they have options outside the traditional lending sources.  Compound Profit offers commercial financing options.  If you need equipment, we can finance most types of equipment, even for start-up companies.  If you need cash flow, we offer programs that can provide the cash you’ve been looking for…. and often without going into debt!  If you need short-term funding to acquire products from your supplier, we can help you with purchase order financing. If you need to purchase or refinance commercial real estate, we can help you with that too.  

We have access to a multitude of lenders in each of these areas of lending and we have the ability to match your needs with a lender who can approve your request.  Whether you have been declined due to credit challenges or just because you are too new in business, we will work to get you approved.

Compound Profit is a business funding and advisory corporation, assisting small and mid-sized business owners in need of working capital and equipment financing.  We have an experienced team of consultants located throughout the United States.  Working with the business owner, we create solutions to overcome their obstacles.  Consultations are free, as are the financing proposals. 

If you are a business owner who has been struggling with cash flow, or who feels hindered by tightened lending policies, there are other options.  Compound Profit can show you those options.

Debbie Browning, Compound Profit Advisor

Phone: 877-386-3716  ext 219

Fax: 888-719-6219

dbrowning@cprofit.com

http://www.cprofit.com

Car wrap financing

To Wrap or Not to Wrap? Measuring Return On investment for car wrap advertising & financing

Do you often wonder if you are getting the best value from your marketing investments? You are not alone. As a business owner, you know that advertising is the key to sustained business growth; but how can you be sure that the company’s message is reaching potential customers? Determining the return on investment for advertising dollars is a major challenge for businesses. Marketing firms often suggest using multiple forms of advertising such as radio, television, newspaper, magazines, yellow pages, online campaigns, and direct mail but are reluctant to comment on potential results. And it is clear that business owners would gladly invest more in advertising methods if they could be more confident in their effectiveness.

How would you like to have a rolling billboard sending your message across town? Using a vehicle wrap, you can have your company’s name, telephone number and key selling message traveling the busy streets of your town. Car warps are vinyl advertisements that adhere to your car or truck and last for years without damaging your vehicle’s paint. They are vibrant and dynamic forms of advertising.

How can you be sure the vehicle wrap is working? Research from 3M has been able to determine the effectiveness of moving billboards, or fleet advertising, through the study of Global Positioning Systems installed in trucks and traffic counts. The study was performed by the Traffic Audit Bureau (TAB), an independent non-profit organization that authenticates the circulation of out-of-home advertising such as billboards. In the recent trial, one truck reached an estimated 40,585 people a day in Chicago, where an average Chicago billboard reaches about 48,000 people. While the exposure is comparable, the cost for fleet advertising is much less than the cost for traditional outdoor advertising, according to TAB. Polls also indicate that consumers are more aware of mobile billboards.

How can you calculate your return on investment for converting your company vehicle into a mobile billboard? Determine the dollar value of the average customer you serve. Divide that figure by your monthly lease payment to determine the number of customer your vehicle wrap must generate to pay for the advertising.

Print media, radio, television, and static billboard advertising can cost thousands per month. Yellow page advertising often costs several hundred dollars a month. Businesses can lease vehicle wraps through Compound Profit’s ProntoLease starting at $99 a month. I strongly believe that advertising your business by wrapping company vehicles should be the cornerstone of your marketing efforts.

Check out this article on car wrap financing to find out even more about the benefits of car wrap financing.

 

Stephen B. Lepley, MBA, D.Ph. - slepley@cprofit.com

Compound Profit Business Development

Phone: 877-386-3716  Ext 230

Cell: 423-605-4224

MerchantCard

MerchantCard - Get Working Capital

Ah, the good old days - the early part of this decade.  We were only worried about attacks from those who do not like us. Yes, after 9/11, the economy faltered a bit, but it came back, it seemed nothing was going to hold Wall Street or the economy back.  Then the house of cards that was the housing industry began to fall.  Some of us in certain parts of the nation felt the first effects in 2007, fueled by rising property taxes and insurance rates.  By 2008, much of the nation was feeling the sting as we watched our homes decline in value. 

Of course, oil prices shot up.  Unemployment did too. Then came the bailouts. What was happening to the small business owner - the backbone of our economy?  He / she was busy worrying about the family home, looking at declining revenue,  and trying to make a profit. 

Before they knew it, the Working Capital that was available to them from their friendly bankers to grow their business or get them through a roughe patch began to dry up. In addition to that, many companies had credit cards to pay for those business-related expenses we all have. These of course, helped with cash flow as well.

But banks began to reduce the limits for these business credit cards in 2008. The ripple effect to this move was that business owners had to pay down their balances to get within the new limits.  Banks often sent derrogatories to the credit agencies because the business was now over the (new) credit limit!

In 2010 businesses find themselves starved for cash.  Whether they need lines of credit or a simple loan to grow their business or see them through, the cash is just not there. A banker friend of mine, earlier this year said, “I am not having any fun anymore.  I can’t help anyone.”

Compound Profit (CPC) has answers for the Working Capital needs of small business.  Elsewhere, we have written much about Accounts Receivable Financing.  This option is one of CPC’s strongest programs.  But what about retailers and those who do not qualify for this type of working capital?

CPC has an option for companies that process credit card revenue: Compound Profit Merchant Card.  New businesses, businesses whose owners have some credit issues and businesses that need Working Capital can qualify for an advance on their monthly credit card processing of $1,000 to $250,000 depending on the volume.  And, as they pay down the advance they can request additional advances.

With CPC’s MerchantCard there is no qualifying paperwork, no waiting for months for an approval, no tying up assets as collateral, and no loan showing up on the balance sheet!  The process is pretty simple and funding can begin in as quickly as 10 business days. In addition, CPC will report the transactions to the credit agencies, which will enhance the Commercial Credit of the company, helping build credit in the company’s name, not the owner.

If this sounds like something you or someone you know can benefit from, give us a call or send an email.  Our advisors can help you solve a myriad of problems facing small business today.

Doug Linder - dlinder@cprofit.com
Advisor / Principal, Compound Profit – Tampa Bay
http://www.cprofit-tampabay.com
Phone: 877-386-3716 ext 218
Fax: 888-419-3222

The Future of Small Business Financing

How does the future look for the small business owner? Not too bright, according to a recent Gallup Small Business Index survey, which measures small business owners’ perception of their operating environment, as well as their future expectations. The survey has put into perspective a negative confidence score shift from -17 in April to -28 in July, the smallest value since its inception in August 2003.

It’s also the first time in the index's history that shows overall negative Future Expectations for small businesses; the owners are quite pessimistic about their operating environment, at least for this year and the first half of 2011. In fact, the Future Expectations Dimension of the index has seen the biggest decline – it’s the part of the survey that measures small business owners’ future expectations concerning business income, capital spending, new jobs creation, cash flow and the ease of obtaining financing.

The results of the survey are based on over 600 small business interviews in 50 states. More information about the survey can be found here: discouraged business owners.

It’s the worst score in 7 years, and there’s nothing complicated behind it: the consumer spending growth is quite slow and a snowball effect leads to less capital spending, fewer jobs, and so on. It is clear that small business in New Jersey and elsewhere is really struggling. We are talking about a lack of consumer confidence, as well as about very difficult credit conditions.

Yes, it is true: one out of three business owners considers that getting credit is difficult or very difficult these days, according to the survey. The recession has made the business owners spend their money with care, but the banks are now even more careful.

In a recent meeting with a bank officer, I explained how the use of our smart cash advance product for working capital only evaluated one of the 'four c's' of banking-the character of our customer (collateral, cash flow, character, credit).  He looked at me, and only half jokingly said, "Four c's?  We now have 21 c's! Banks can't make loans except to people who don't need money!"

So, as we get in touch with our markets, recognize they are hurting - can't get lines of credit. We seem to be uniquely positioned to make a seismic change.

Reynolds Dods, rdods@cprofit.com

Compound Profit - New Jersey and eastern Pennsylvania.

Phone: 877-386-3716 ext. 240 / Cell: 609-289-6256

The loan broker

The loan broker – myth or reality?

Lost in the sauce of all the rhetoric about 'increasing loans to small business', improving working capital', enhancing SBA loans, etc., all chiefly to help small businesses grow, is, 'what about the small businesses just trying to ride-out the storm'? They aren't or weren't growing, they were maintaining. Making money, employing people, buying goods, but year in, year out, about the same size.  America is full of such businesses, and they are vitally important. 

But in the autumn of 2008, a perfect storm hit this vital sector of the economy. With the financial meltdown, the customers of these businesses had their access to capital reduced. Banks either reduced existing lines of credit or pulled them in all together, and furthermore, they stopped making new loans.  So what do you do? You slow down your payments to the people you owe: vendors, landlords, even banks. Other vendors, needing the business to continue, put up with this. Same for landlords as long as it doesn’t get out of hand. 

But banks can’t do that. They aren’t allowed to, as the regulators get after them. So now, banks have portfolios of loans in default, typically called “special assets”. These often get moved from the normal loan servicing department to ‘special asset’ departments - the loan workout people.  And now, the businesses aren’t getting service calls from their friendly banker, they are getting calls from hard-nosed people wanting their money NOW.

Before 2008, there were people who routinely helped in this situation: the loan brokers.  They would review the portfolios of special assets and then go find other institutions with an appetite for more risk to buy these loans.  Well, that money is GONE.  So, here we have a situation where banks have more ‘special assets’ than ever, and no place to get rid of them. They are stressed out. On the other side we have good, hard-working business owners who did nothing wrong, getting hard-nosed collection calls.  They are stressed out. Certainly, nobody involved in these situations is happy.

Let’s spread some happiness.

By connecting with the special asset managers in banks, profit advisors with Compound Profit can identify bank loans with businesses which fit our smart cash advance criteria.  Perhaps the bank’s special asset manager even makes the introductory phone call. The business owner will likely be very receptive to someone offering a way out of the terrible place they find themselves in. They will be incented, and likely won’t have an issue with a small fee if it offers a solution. The banker as well is incentivized-they have a bad loan they want to get off the books, so they may be quite happy to absorb some fees - take a small discount - to get rid of these loans.

So, we set-up the smart cash advance, work with the bank so that they can deduct funds from the advances to start to amortize the loan, with the balance going to the business. This one nudge may be enough to get the business back on a growth track. Or even with no growth, maybe now THEY can pay THEIR creditors on time so they in turn can increase the cash flow for a large group of people.  All because we want to make some people happy.

And long term, chances are that the newcomers to Smart Cash Advance will come to appreciate this flexible product and will prefer it over more traditional funding vehicles going forward.  And since most people like to spread good news, they will tell all their friends.

Reynolds Dods, rdods@cprofit.com

Compound Profit-New Jersey and eastern Pennsylvania.

Phone: 877-386-3716 ext. 240 / Cell: 609-289-6256

Factoring Accounts Receivables – Definition

Factoring Accounts Receivables: Definition, Advantages, Compound Profit - specifics

Factoring Accounts Receivables is the purchase of some or all the accounts receivables that have been completed in various transactions at a discount. From a business owner’s point of view, factoring accounts receivables is similar with improving your cash flow by giving your customers a small cash discount if they pay their invoices much faster.

Compound Profit specifics:

- We work with big companies, as well as small businesses and startups;

- We are very focused on customer service; although we have a national presence, the local offices are independently owned and outstanding customer service is the definition of our success;

- We also provide financing to companies who are in their pre-banking phase of life; they may be valued account holders but they can’t qualify for a business loan because:

a) They have only been in business for a few months or years;

b) They are overtrading / undercapitalized;

c) They have bad credit;

d) They are growing too fast;

e) They activate in a market niche that the banks just don’t like (construction, restaurants, and so on);

f) Any other reason that may cause these companies not to fit within bank’s underwriting guidelines.

We offer several unique financing solutions such as Factoring, Invoice Discounting, Credit Card Factoring and a few others.  So we can help just about any company if they are either invoicing their customers or if they accept credit cards.

Factoring accounts receivables is one of our important funding products; we lead the way in this area, because we can also help retail companies, something that typical factoring companies won’t do. We also offer a very unique service that provides a “use us as you need us” approach.  Any company that uses our services can choose to factor all of their receivables, or just a part of them; this puts them in control of their cost of financing and puts our flexibility into perspective.

We don’t have any hidden costs, we purchase the receivables and we’ll take even small invoices, starting with $1,000; most of our competitors will only take your invoices if their value is at least $50,000.

We take a holistic approach to working with our clients, offering them free consulting, in order to improve their business position and get them to the point where they can get traditional loans.

We work with almost any company who has “business to business” accounts receivables or accepts credit cards. Another thing that sets us apart is that we actually like funding contractors and specifically sub-contractors and restaurants. There’s virtually no one in our industry who likes to focus on these markets.

One more thing: if you choose Compound Profit’s Accounts Receivable Factoring service, the money can be in your account in as quickly as 24 hours.