The 4 Best Business Tips You'll Ever Receive

We are business owners, and so too are our clients as well as many of our friends and associates. So, we first sat down and devised a list of the best business tips we could think of. Then we asked around a bit, and eventually came up with a comprehensive list. We then refined the list, limiting it to only the ones that would have the greatest impact on your business. We hope they help, and please feel free to comment and suggest any we may have missed.

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WIMPY'S FINANCES

For those who remember the corpulent character J. Wellington Wimpy or better known as just “Wimpy,” who appeared in the popular and long-running cartoon, Popeye the Sailor, they may also recall that Wimpy was always short on cash.

In fact, perhaps Wimpy’s most memorable statement was the classic, “I’d gladly pay you Tuesday for a hamburger today.” Well, if Wimpy had been savvy enough to enlist the services of a factor, such as the experienced financial experts at Factor King, he not only would have had his hamburger immediately but he also wouldn’t have to pay for it on Tuesday or any other day.

That’s because with factoring, also known as Accounts Receivable Financing, a company sells its accounts receivable to the factor at a discount and in return gets quick cash that the company can use for a variety of things from covering payroll and paying vendors to purchasing new equipment to help facilitate growth and expansion plans.

Plus, unlike a traditional small business loan, with factoring there is no accrual of debt.

In addition, factoring allows business owners to keep control of their company and gives them the ability to grow at their own pace. Smart business owners will also use the surplus cash for speedy-pay discounts from suppliers. For many businesses, factoring can be an effective long term cash flow management solution and not just a quick fix.

So, if your company has a voracious appetite, just like Wimpy, get your hamburger today. Factor Kings’ experienced staff will make sure you don’t go hungry. Call toll-free at 888-919-7770 or visit www.factorking.com.

Bigger isn’t always better. Microfinancing is helping businesses grow

There was a time, not too long ago, when raising cash through venture capitalists was the way to go. But, in the last few years more small business owners have been taking a road less-travelled to funding: Microfinancing.

Although the numbers vary by lender, most microloans are under $25,000. According to a recent report in Entrepreneur Magazine, non-bank lenders such as Accion USA and the San Francisco Bay Area’s Opportunity Fund provide loans that average just $7,000. And, even more surprising is that these same lenders say that the businesses they lend to have a survival rate that’s more than twice the national average with repayment rates being about equal to traditional banks.

In part, micro lending as a practice has been growing as many banks continue to struggle to serve the needs of small business owners.

Experts in microfinancing believe that borrowers do better than owners who've gone the route of traditional banks or credit cards due to a variety of reasons including more thorough screening, where Micro lenders take care to better know business owners personally, a practice that is not generally employed by traditional banks.

In addition, microloans are often made in a group setting where business owners support each other and are also financially accountable for each other’s loans.

Moreover, smaller-scale loans help entrepreneurs stay focused on their business and less likely to get caught-up in over-expansion.

For those small business owners interested in giving microfinancing a shot, here are some great ways to help get started:

SBA’s Microloan Program—The SBA provides small, short-term loans available to small businesses and certain types of nonprofit organizations through specially designated intermediary lenders. The intermediary lenders make loans to eligible borrowers where the maximum amount is $50,000 but most microloans average about $13,000. Terms vary but most SBA microloans can be used for working capital, to purchase inventory or supplies, furniture or fixtures and machinery or other equipment.

Accion USA—Accion is a leader in U.S. microfinance and has been in existence since 1991. The company is committed to helping microentrepreneurs secure affordable small business loans. They lend with the mission of empowering small business owners by providing access to working capital and financial education.

 

Opportunity Fund--Opportunity Fund, based primarily in California, is a not-for-profit social enterprise that has helped scores of families build financial stability. The organization brings together microloans for small businesses, microsavings accounts, and community real estate financing.

However, microfinancing does have its limitations such as generally smaller loan sizes and certain restrictions on the types of activities that capital can be used for. For example, the SBA stipulates that its microloans can not be used to pay down existing debt.

So, still other small businesses might benefit from less restrictive ways of raising capital, such as short-term loans or factoring.