Print
Time To Startup!
Inspiration and Information for Starting Your Business

Archive for the ‘Cash Flow’ Category

What Lenders Consider in Making an Investment

Posted on February 10th, 2011 by The BizFilings Team
Category: Angel Investors, Cash Flow, Finding Money to Start a Business, Lines of Credit, Start A Business, Venture Capital, Women-Owned Businesses, Work For Myself

While conditions are already difficult for small business owners in regards to achieving their credit needs, it is likely even more difficult for women-owned businesses.

“Traditional lenders are requiring you to jump through more hoops, and they are applying less attractive terms after all the jumping is over,” writes Entrepreneur magazine contributor Kim Kiyosaki. “Private lenders and investors are more cautious and have upped their standards, as well. What’s a businesswoman to do?”

When seeking credit opportunities, Kiyosaki advises women business owners to consider four basic factors that lenders – banks, microlenders, angel investors or venture capitalists – consider when deciding whether or not to approve a loan.

  1. The project. This refers to the startup, organization or business venture that is seeking funding. What is it? What will it do? Why is it unique, and why does it deserve funding over others like it?
  2. The partners. These are the main principals – initial investors, founders, managers, participatory advisers – involved in the creation of the venture.
  3. The financing. Investors, perhaps more than anything else, want to see the numbers. Such figures include growth and revenue projections, prior investments, current sales and past deals.
  4. The management. “Money follows management,” Kiyosaki points out. Make sure that lenders are confident in the competence and devotion of those who will determine how their money is spent.

Loan options for woman-owned businesses

There are loan options available for woman-owned businesses. The Prequalification Pilot Loan Program uses intermediaries to assist prospective borrowers in developing loan applications and securing loans. A Women’s Business Development Center or a Small Business Development Company are examples of intermediaries. Here’s how the loan process works:

  • The loan package is submitted to the SBA and a decision is generally rendered in three days.
  • If approved, the SBA issues a letter of prequalification stating the SBA’s intent to guarantee the loan.
  • The maximum loan under this program is $250,000 with a guarantee of 85 percent up to $150,000 and 75 percent for loans over $150,000.
  • The intermediary can usually help the applicant find a competitive lender.

Additional resources

Business Resources for Women Entrepreneurs
A Guide to Starting and Running a Woman-Owned Business

No Comments

Venture Capital Expected to Surge in 2011 as Startup Scene Expands

Posted on December 29th, 2010 by The BizFilings Team
Category: Angel Investors, Cash Flow, Financial Services, Finding Money to Start a Business, Form My Business, Grow a Business, Lines of Credit, Start A Business, Venture Capital, Work For Myself

Venture capital is often considered a funding option only at a significantly developed stage – above angel investment and beyond initial bank loans or personal financing. Since the recession began, VC funding has declined substantially, despite a boom in a number of highly regarded tech and web startups.

In fact, the total amount of money raised by U.S. VC firms dropped year-over-year for 2008 and 2009, according to a statement by Mark Heesen, president of the National Venture Capital Association, to Reuters. And that number is expected to drop for 2010 as well.

However, improving market conditions, as well as a surge in the startup scenes of California and New York City, may contribute to an upswing in VC funding over the next few years. There is also the much-anticipated initial public offerings of companies such as Facebook and Groupon that is expected to occur sometime in the next two years.

Other major venture capitalists such as Merus Capital of Palo Alto, California, are upping their investment funds to meet the anticipated demand. Merus, founded by a former Google mergers and acquisitions executive, is now preparing to raise a new $100 million fund for tech startups and later-stage development companies starting next year.

For entrepreneurs forming a company in one of these startups hubs, it may be a good time to begin floating around ideas for your next round of investing.

1 Comment

Funding Options for Startups

Posted on December 28th, 2010 by The BizFilings Team
Category: Angel Investors, Cash Flow, Equity Loans, Financial Services, Finding Money to Start a Business, Grow a Business, Lines of Credit, Small Business, Start A Business, Venture Capital, Work For Myself

Starting a company from home is a very common option for startups with limited funding. Apple, Google, eBay, Amazon and Facebook were all launched in dorm rooms, garages or homes using little more than a few computers.

Still, this does not mean that a fledgling enterprise will not need some sort of financing to help it reach the next stage of development.

Until the company can catch the attention of venture capitalists or angel investors, entrepreneurs can look to a number of other options for their financing needs.

Commercial bank loans can provide essentially all the funding a startup needs without the threat of managerial involvement. However, paying off the debt is easier said than done, especially as it takes a good amount of time for a startup to become profitable. The process of loan approval is also a more stringent process.

“Banks want to see two sources of repayment: cash flow from your business and a secondary source – typically collateral,” writes AllBusiness.com. “Lenders will look at your past financial statements, including those of any business partners.”

Home equity loans offer low interest rates and are easier to acquire. However, the risk of losing a home is often too great for the entrepreneur to take.

Startups can also consider credit cards, U.S. Small Business Administration-backed loans and equipment leasing. Although there is always almost a downside to a lending option, they should be considered on a case-by-case basis.

1 Comment

Chase Surpasses Small Business Lending Goals for 2010

Posted on December 28th, 2010 by The BizFilings Team
Category: Cash Flow, Financial Services, Finding Money to Start a Business, Grow a Business, Lines of Credit, Small Business, Venture Capital

Chase Bank announced Tuesday that the Chicago-based bank has exceeded its lending goals for 2010, providing more than $10 billion in credit to U.S. small businesses.

The volume makes Chase the No. 1 small business lender in the country, according to the Small Business Administration. It also represents a 40 percent jump over the bank’s lending volume from last year.

The loans were spread among more than 250,000 small businesses with annual revenues of less than $20 million.

“Small businesses are putting these loans to use every day in cities and towns all across the country, creating jobs and helping our economy get back on its feet,” said Michael Cleary, CEO of business banking in retail financial services for Chase.

However, as the economy only gradually improves, credit remains a crucial problem, preventing owners from hiring in significant numbers. An October report by the New York Federal Reserve declared that more than three-quarters of small businesses met little or none of their credit needs for the first half of 2010.

Still, entrepreneurs forming a company may at least take comfort in Chase’s jump in credit availability, as well as other recent reports finding heightened confidence among small business owners.

1 Comment

Small Business Lending Fund Passes Through Congress

Posted on December 23rd, 2010 by The BizFilings Team
Category: Cash Flow, Financial Services, Grow a Business, Lines of Credit, Small Business, Venture Capital

Entrepreneurs forming a company may take comfort in a recently passed piece of Congressional legislation that will provide greater small business lending incentives to community banks.

The newly formed Small Business Lending Fund will provide $30 billion in small business lending funds to community banks with less than $10 billion in assets.

“Increasing access to capital is the key ingredient our small businesses need to start investing, growing and hiring again,” Washington Senator and Democrat Maria Cantwell said. “I commend the Treasury Department for moving quickly to set up the Lending Fund to get job-producing lending capital flowing to the local banks and businesses who know how to put America back to work.”

The SBLF, which is part of the Small Business Jobs and Credit Act passed in September, is largely in response to the lack of available credit that has stricken many small businesses since the recession began.

As small businesses employ nearly 50 percent of the U.S. private workforce, the sector is seen as vital in job creation and, ultimately, a full-scale economic recovery.

1 Comment

Google Ventures Serves as Both Incubator and VC Firm

Posted on December 20th, 2010 by The BizFilings Team
Category: Cash Flow, Financial Services, Finding Money to Start a Business, Grow a Business, Small Business, Start A Business, Venture Capital, Work For Myself

Google knows how difficult forming a company can be. At least, that’s what’s suggested by the company’s startup investment arm Google Ventures – let alone their motto “Don’t be evil.”

Since launching in March of 2009, the $100 million-per-year fund has taken on more than a dozen tech startups, ranging in fields from healthcare to payment services to biotech.

What’s more, Ventures has recently opened up Startup Lab – a complex located right by Google’s Mountain View, California, headquarters – in which the company’s ventures can work, utilizing many of the same resources available to Googleplex itself.

But, perhaps fitting the culture of the branch’s multi-billion dollar parent company, Ventures seeks to set itself apart from other venture capital firms, even equating investment from Google Ventures to winning a “Golden Ticket.”

“We plan to be very active in 2011 in the seed space,” Bill Maris, managing partner of Google Ventures, told Reuters. “Startup Lab is an expression of that interest.”

The startup culture of Silicon Valley is world-renown, with Google often referenced as a symbol of the region’s entrepreneurial and technology-minded spirit. As Venture’s startups begin to take off, the company hopes to further establish itself as the leader in tech innovation.

1 Comment

SBA Launches Micro Loan Program Aimed at Quickly Getting Credit to Small Businesses

Posted on December 20th, 2010 by The BizFilings Team
Category: Cash Flow, Financial Services, Finding Money to Start a Business, Grow a Business, Lines of Credit, Small Business, Start A Business, Venture Capital, Work For Myself

The U.S. Small Business Administration has announced plans for a new lending initiative aimed at quickly providing small businesses with micro loans in response to recent reports that small firms are not receiving adequate credit.

According to the SBA, the loans range up to $250,000 and can be approved in a matter of minutes or up to 10 days through an application that is only two pages long. Analysts hope the program will aid cash-strapped entrepreneurs in forming a company.

“Many entrepreneurs and small business owners across the country have enormous potential to drive economic growth and create good-paying jobs in their local communities, but too often they face barriers in fulfilling that potential,” said Catherine Hughes, chairperson of the SBA’s Advisory Council on Underserved Communities.

The lending initiative is largely in response to an October report by the New York Federal Reserve, which found that three-quarters of small businesses that applied for loans in the first half of 2010 received little or none of the credit they requested.

However, a report released this week by the National Federation of Independent Business declared that 91 percent of surveyed small businesses’ credit needs were currently met, suggesting to many that the actual state of small business credit is difficult to determine.

1 Comment

The Art of Budgeting for Your Small Business

Posted on December 9th, 2010 by BizFilings Team
Category: Business Inspiration, Cash Flow, Form My Business, Grow a Business, Small Business, Start A Business, Work For Myself

There’s a question that small business owners often have but seldom ask. And if they do, it’s in the sheepish voice of a kid asking whether doing homework is really all that important.budget_opt

The question is whether a small business needs to keep an actual budget.

You can see why the question would come up. Many homes function without actual budgets in place. You make as much money as you can, only spend what you can afford, and things work out just fine. Right?

The problems in both the budgetless home and the budgetless business are the same. If you don’t have a tight handle on what’s coming in and what’s going out, you don’t know where you could be saving, where your money drains are, or how you can quickly compensate for sudden unexpected expenses. And you certainly can’t plan for growth if you don’t know where you are today.

Use a budget to predict needs and results, determine and adjust goals and implement strategy. Use your budget to keep score, to tell how well or poorly you’re doing compared to how you planned to do, and to make necessary adjustments in a timely manner.

“A small business has a greater need for budgeting than its mid-sized or large cousins because a smaller operation often has limited resources and even more limited access to capital should an unforeseen crunch occur,” said Ken Yancey, Jr., executive director of the Service Corps of Retired Executives (SCORE). A unit of the Small Business Administration (SCORE) advises small businesses on how to operate successfully.

“It’s essential to maintain control and evaluate performance on an ongoing basis, and a budget is just what the doctor ordered for that kind of task,” said Yancey, former president of the North Dallas Banking Center. “Even if a firm is currently highly profitable, budgeting is still a good investment in time as the process stimulates planning for new products, methods and services to keep ahead of the competition.”

Want to learn more about budgeting your income for your business? Just pay a visit to www.toolkit.com.

Are there budgeting tips you would recommend to small business owners just starting their own business?

1 Comment

Study Finds Small Business Bankruptcy Filings to be Down Slightly Across the Country

Posted on December 7th, 2010 by The BizFilings Team
Category: Cash Flow, Finding Money to Start a Business, Small Business, Start A Business, Work For Myself

A new study released by Equifax finds small business bankruptcies have experienced a general decline in filings, according to data from the third quarter. The bankruptcy survey, which focuses on select metropolitan regions across the country, is viewed by many to be a crucial indicator of small business activity and health.

Overall, bankruptcy filings in key urban areas fell by 4.41 percent compared to the 2009 third quarter, while filings fell by 1.23 percent since the beginning of the fiscal year.

The New York City tri-state area experienced a 1.56 percent decline in small business bankruptcy filings – a modest decrease but comforting compared to California’s Inland Empire region, which saw a 10 percent gain.

“Our analysis on small business bankruptcy continues to indicate ongoing uncertainty in today’s marketplace,” said Dr. Reza Barazesh, senior vice president of Equifax Commercial Information Solutions. “While business bankruptcies have begun to reverse course in some regions, it remains to be seen how small firms will steer through economic headwinds and sustain growth.”

Other recent small business surveys have shown confidence among owners and entrepreneurs starting a company to be improving. With the gradually improving availability of credit, as well as plans to hire and increase spending in 2011, small businesses seem poised for the rebound that is expected to occur within the first half of next year.

No Comments

New York Social Media Startup Acquires $4 Million in Latest Round of Investment

Posted on November 30th, 2010 by The BizFilings Team
Category: Business Inspiration, Cash Flow, Grow a Business, Small Business, Start A Business

Calling upon its reputation as one of the most talked-about new startups in New York City, Hashable has raised $4 million in investments in a venture round led by Union Square Ventures.

Originally intended to be a Yahoo Finance competitor called Track.com, CEO Michael Yavonditte, upon realizing the limited potential of the financial network, restructured the company entirely and began focusing on its social media potential.

“Hashable helps you document real-world connections with friends and professional contacts by using hashtags to describe interactions,” Jennifer Van Grove, a contributor for Mashable, writes. “Hashable tracks actions, connections, salutations, props and any other type of hashtag you can dream up.”

Through cross-utilization of Twitter handles or email addresses, Hashable can “introduce” new friends or followers and track their correspondence – a novelty to which the marketing potential is apparent but yet to be seen.

Now, only a few months after its beta launch, the company runs a valuation between $25 million and $30 million. As New York City is hashing out its resume of new tech ventures and web startups such as Hashable and Foursquare, many entrepreneurs starting a company are looking to the newly emerged “Silicon Alley” as a viable business destination.

No Comments
« Older Entries
Newer Entries »