NO GUARANTEES

No Guarantees is one of the cornerstones of Free Market Economics. There are no guarantees. Business success happens through methodical, daily efforts. Healthy competition in all sectors ensures that even the greatest company on earth can be quickly humbled by the next small, innovative enterprise to come along. The same goes with business financing. Many business owners are in the hot pursuit of a guaranteed loan. As surprising as it may seem, almost everyone who owns a business has been in this situation: wanting a guarantee—in writing—assuring the loan. In essence, everyone wants to know that their efforts are going to be worth the battle. Understandable as this impulse is, it is simply unrealistic.
In most cases, the loan amount issued by the lender is based on careful analysis of the borrower company’s financials (often verified through tax returns and projections), sales figures, and overall stability. Refer back to the 5 C’s of Lending for a better understanding of lender criteria. Other tangents can alter the loan process, such as unexpected discoveries of credit problems. Many entrepreneurs have a series of small business startups in their pasts; each of these past ventures will be subject to scrutiny during the loan process.

THE RISK OF ALTERNATIVE FINANCING
To anyone who has been denied a bank loan for a small business, it may seem that the proverbial door of opportunity has closed. Many choose to continue looking for a solution. For most that are determined to start a small business, alternative business financing can be a feasible solution.
There are several types of alternative small business financing available to entrepreneurs, but it’s important to understand the risks involved. Some financing alternatives include factoring, commercial credit lines, advance-pay programs, purchase-order financing and supplier-guaranteed lines of credit. Even these widely accepted alternatives have risks including higher interest rates attached to private and commercial finance lines, and reduced realized profits—primarily with factoring loans and cash advances paid against Visa or MasterCard merchant account receipts.
As every situation is different, it is important to weigh these risks and how they can affect your small business’s bottom line. In the case of credit card advances, if the 7%-15% that the lender requires for each card swipe still nets your business the revenue it needs to remain profitable, then accepting a loan to get you through a rough spot could be a viable answer. Similarly, if receiving a loan for 70% - 80% of your accounts receivable balance will bring your books out of the red, then the ‘risk’ may not seem high.
There are 3 primary factors to consider when seeking alternative small business financing.
The first is the overall cost of the type of small business financing you are seeking to obtain. Beware of hidden fees and other costs that may not be disclosed by the lenders early in the application process. Fees typically appear during the closing, added to the total amount financed upfront.
The second factor to examine is how will affect your taxes. It’s often overlooked but a crucial part of consideration. If realized when it’s too late a business owner may be able to save on taxes through appropriate deductions and annual renewals.
Third and finally, be aware of how your small business credit score will be affected. Think about how much the small business loan will actually cost over time, with the other implications excluding the monetary expenses.

StrongBusinessCredit continues to deal with clients who have already taken out alternative financing and those who are ready to do so. What we find constant and true is that no matter at which point we assume the process, the business owner always has room for improvement. Through lack of time and know-how, the business owner always benefits from the assistance of a professional. In almost all cases, the situation comes down to one fundamental—planning. Revisit your business plan. Even if it seems completely redundant to you and exceptionally unnecessary, it’s absolutely crucial to keep revisiting the business plan and projections. Again and again.

http://www.24-7pressrelease.com/press-release/no-loans-when-you-need-them-96395.php
Ilya Bodner

Small Business Owner

Initial Underwriting Group

Social Entrepreneurship

There is a movement across the globe today that says solutions to society's most pressing social issues cannot be left up to the government to determine. Social entrepreneurs are business owners that decide to take on the work of engaging with social problems implementing systems that offer broad-scale change.


Business People That Change the World
A social entrepreneur uses the principles of entrepreneurialism to develop a business venture that brings about social changes. The performance of a business is normally measured by profit and return on investment. Social entrepreneurs frequently do their work through non-profit organizations, but this does not preclude them from being profitable. These businesses go the further step of adding a social value component.
Fast Company Magazine publishes an annual list of the best social entrepreneurs that fit their definition: "using the disciplines of the corporate world to tackle daunting social problems." These are a few of the winners:
ACCION International. This is a nonprofit organization that provides business services and microenterprise loans to men and women in Asia, Africa, Latin America and the U.S.
City Year. This nonprofit organization takes young people from various backgrounds in the U.S. and South Africa and engages them in a year of full-time service and gives them leadership skills they can use to change the world.
College Summit. This is a national college access program in the U.S. that gives schools and districts the means to increase the college enrollment rate, especially from students with low-income backgrounds.
Mercy Corps. This organization takes places in the world afflicted by conflict, poverty and oppression and helps to transform them in peaceful, productive, prosperous communities.
Social entrepreneurs typically are completely committed to transforming their area of concern and it is the driving force behind their business. They have the skill to carry a vision to the ultimate in practical manifestation. They have they uncanny knack for enrolling masses of people in their strategy, which is decidedly user-friendly and easy to implement.
Are You a Social Entrepreneur?
If you are the kind of business person that can see solutions where others can only see problems and you have the creativity and drive to develop a venture that resolves the issues, you may be a social entrepreneur. You will be driven to affect social change while using your business skills to generate the revenue to make it happen. Like any other small business, with the right business plan and startup funding, you can become profitable while creating long-term change where it matter the most.

ALTERNATIVE ENRICHMENT

Alternative financing may be the perfect solution for companies looking for additional means of securing adequate business funding. This form of financing may be used to carry a new venture through its early phases of development, restructure existing debts, or take the business to its next level. Conventional lenders such as banks and private lenders may shy away from riskier businesses and not focus on business credit. Furthermore, an established company may find itself needing additional capital, yet for various reasons is ineligible for a loan.
Alternative financing is provided through a non-conventional source. In this chapter, you’ll discover your options. Topics of discussion include factoring, commercial finance lines, advance pay programs, lease financing, purchase-order and supplier-guarantee financing, peer-to-peer business lending, strategic alliances and venture capital. The dangers of alternative loans are also discussed, as it is imperative to understand the consequences of your choices. As there are no guarantees in personal affairs, the same applies to business.

ALTERNATIVE FINANCING FROM A DIFFERENT PERSPECTIVE
When a business owner or new entrepreneur seeks financing, many decision factors remain constant across the various types of financing, including the 5 C’s of Lending. With alternative business financing the lender can be a private investor, equity firm, or angel investor. Required additional documentation on the business is inevitable. Be prepared to include a thorough business plan for newer businesses, prior tax returns, and projected financials for multiple years of operation.
A personal loan, or personally guaranteed loan, is mostly driven by the business owner’s personal credit. On the other hand, alternative business financing is valuated by the strength of the business, or business model. Many times, the creditworthiness of the business is determined by a Paydex Score through Dun & Bradstreet or similar scoring by other business credit reporting agencies. Like any other loan process, when the requirements are met to the lender’s satisfaction, the business is then funded. Instating higher interest rates justifies the alternative lender’s risk, a process important to understand about these lenders.

Diamonds Are A Cereal Marketer's Best Friend

When C.W. Post started a small business in 1895 with his first batch of "Postum" (breakfast cereal) he probably did not foresee his company getting into the diamond business. The cereal company has "followed a path of delicious innovation, creating cereals that have defined the breakfast experience for generations of families" and now it has literally put a twist on its "Shreddies" product by offering the cereal in the shape of diamonds rather than squares.


Something New from Something Old
It's a playful, yet brilliant marketing scheme that is reaping the cereal a lot of consumer attention. The breakfast cereal, produced by Post Cereals and General Mills has been a favorite for years in the U.K., Ireland, New Zealand and Canada. It looks like small squares made of malted, interwoven whole grain wheat. Believe it or not the name of the cereal is the slang term used to describe men's undershorts. (This is a not a piece of trivia used in marketing campaigns for the cereal.) The last time it got this much attention was during the "Wayne Gretzky" Shreddies cereal box era.
If you were thinking Post didn't actually do anything different to the humble square other than tip it on its corner to produce the diamond shape you are absolutely correct. The point is that the company has offered a new perspective on a product that has been around for years and it's making an impact on the public awareness of the food. It's all about putting a new spin on an old thing.
Post has come up with a promotional campaign that is getting consumers involved by voting on either the square or the diamond version of the Shreddie. A cereal box design is offered for each version while the official Diamond Shreddies website allows you to vote for your pick and download printable posters to put up around the office promoting the options. A ticker tape constantly scrolls across the face of the website revealing the latest voter news such as "Square predicted to gain support in Northern B.C." and "Diamond predicted to lead in the West."
Something New to Promote Your Products
Excitement over the new shape, which isn't really a new shape at all, has increased sales by 18%. Shreddies have been around for about 70 years. If you are struggling with your sales for a product that is tried and true, maybe it's time to come up with a new slant on promoting your product. The large corporations are doing it, so there's a good chance it will work for your small business.
Initial Underwriting Group *Breaking Down the Barriers to Small Business Financing*www.initialunderwriting.orgwww.strongbusinesscredit.com

CREDIT BASED VS NON-CREDIT BASED FINANCING

When it comes to non-credit based small business financing, the benefits are evident. There is a very good chance you will be able to take advantage of great interest rates as long as your established business credit is favorable. Non-credit based small business financing comes in many different forms and is an excellent way to begin building your relationships with vendors. Many vendors will extend credit without a credit check if you have your Tax-ID number and a few other solidifying factors. In turn, when you make your payments to these particular vendors, they’ll report favorably to the credit bureaus—and you’ll be well on your way to building strong business credit. This can be true for the reverse situation as well. If you are unable to make your payments on time, these vendors may report late or slow payments to the credit bureaus and damage your small business credit before you ever get it off the ground. Be careful with non-credit based financing, because it’s not a loophole for lending terms. Many businesses have come to StrongBusinessCredit because they have been crippled through mischievous actions taken by owners on non-credit based payments.

GETTING RID OF BUSINESS DEBT
To ensure that your business continues to be successful and profitable, it may be advantageous to get rid of short term debt. Below are some helpful hints for staying most productive:
ü Focus on one debt at a time. If you can afford to put more money into one debt than any others without incurring late fees or bad marks on your business credit, it will be easier to rid the business of debt.
ü Avoid new debt. Taking out a new loan, for example, is counterproductive to paying off business debts—it only creates more.
ü Increase your Business Profit Margin. Higher profits should first be spent on reducing debt. If higher profits are maintained, they will soon end up in the owner’s pockets.
ü Strategize on YOUR plan. As discussed throughout this book, thorough planning is essential. Paying down a debt is no different. Have a plan that works for you, and follow your own directions relentlessly.

The bottom line: these tips are merely guideposts; your success relies on your business plan. Always plan for the worst! StrongBusinessCredit suggests referring back to the chapter 1, dealing with business plans and proper projection planning. Within your original business plan, the bad times you may encounter should be predicted and mitigated. Without such precautions, your business is vulnerable to failure.

UNDERSTANDING FINANCING

New small business leaders and managers have to develop at least basic skills in financial management. Expecting others in the organization to manage small business finances is clearly asking for trouble. Basic skills in financial management start with the critical areas of cash management and bookkeeping, which should be done according to certain financial controls to ensure integrity in the bookkeeping process. Small business owners should learn as soon as possible how to generate small business financial statements and how to analyze those statements to really understand the financial condition of the business. Financial analysis shows the "reality" of the situation. Financial management is one of the most important practices in business. This topic will help you understand basic practices in small business financial management, and build the basic systems and practices needed to help your small business thrive. StrongBusinessCredit is a huge fan of professional mentoring. If you are inexperienced in small business financial management, then you should acquire an accountant to help you set up your bookkeeping system, generate financial statements and do some basic financial analysis. But don’t count on an accountant to completely take over your responsibility for financial management. The accountant can help you set up a bookkeeping system, generate small business financial statements and analyze them, but you must understand financial data to the extent that you can understand the effects of your management decisions, the current condition of your small business and how decisions will affect the financial condition of your small business in the future.

Starbucks Used To Be A Small Business

When our forefathers arrived on this continent they brought with them a vision of a new world with thriving commerce and raucous marketplaces. No matter what the media may be pushing on us about the economy, the vision of our predecessors is just as alive today as it was a couple centuries ago. If you don't believe it, then kick yourself next time you're standing in line at Starbuck's waiting to pay $4 for a cup of coffee.


Creating a Market with a Cup of Coffee

Howard Shultz was a poor Brooklyn kid struggling to make his way through college, and because he believed he could create a need for caramel macchiatos and chai lattes, he is now the head of a 30-something billion dollar multinational string of coffee shops. After interviewing Shultz, 60 Minutes reporter, Scott Pelley decided the entrepreneur is "creating his own subculture and intends to take the whole world along."
Shultz first became interested in Starbuck's when as a plastic salesman he was intrigued by the volume of plastic drip-brewing thermoses it was buying from the plastics manufacturer that employed him. Shortly after coming on board with Starbuck's he found himself in a love affair with the pulsating coffee culture of Italy. He suddenly was struck with the idea that U.S. patrons would be receptive to elegant gathering places with a spirit of community exchange, all the while sipping on connoisseur coffees to their heart's content.
In 1987 when Starbuck's when up for sale, his inspiration swayed investors to fork over $3.8 billion and he eventually exceeded his goal of 125 outlets in 5 years with 165 stores by 1992. By 2008 there were approximately 11,000 stores in the U.S., with another 4,000 - 5,000 in foreign countries. With fiscal 2009 Q1 net earnings down to $63.3 million, the hot beverage mogul will be making some changes to streamline the operation and increase profitability.
Shultz is a firm believer that the success his empire is based on the philosophy behind the operations - that he created a place for humanity to meet and make human connections. It's an alternative environment to work and home. He says the reason Starbuck's stores are opened across the street from each other is to cut back on the lines where something like 40 million people a week wait to imbibe 300 million plus gallons of brew each day..
Find Your Niche and Make It Happen

Pretty much everyone in this country comes from pioneering stock or from people that knew how to gather the right resources to make something happen. Find your "niche" and build a company around it that offers an alternative solution for a need that's waiting to be filled. The resources, technology, information, financing and business mentoring are all available to support your efforts. This is one of the greatest times in history to launch a business.