Factor My Invoices Blog from Charter Capital

An Optimistic Future for Small Business

2009-06-22T12:05:00.000-07:00

Recent economic reports have indicated that we may pull through the current economic crisis reasonably soon. Many economists believe that the economy is beginning to show signs of recovery.

However, the fact remains that any rebound from the current recession may be muted and difficult see in real terms. Even if economists see recovery, it is still too far off to have any positive effect on small business. A concrete example of this slow road to recovery is the average bank.

Most banks are still not lending to small business nearly as much as they once were. Even in the wake of positive economic reports, these lenders are still tightly holding onto their funds. So it seems, for small business, the economy has not yet begun to stir. With more and more businesses seeking out the necessary funds to drive their business out of this recession, it's clear that traditional lending is not meeting this need.

Those that are seeking some form traditional bank financing are currently better off looking for private asset-based funding. During troubled times like these, asset-based financing (such as invoice factoring) has come to the aid of businesses many times by providing the necessary financing that traditional lenders are unable to consider.

While banks continue to recover, more business owners are discovering the benefits of a lending alternative like asset-based financing (invoice factoring). With the funds they need, businesses can continue to operate and eventually grow once the recession ended.

While economic optimism is contagious, it may not truly reflect the current conditions and address the needs of businesses today. The truth: The outlook for the economy remains uncertain, but there is light at the end of the tunnel.

In Tough Times, Innovation Can Fuel Small Businesses Growth

2009-06-03T07:07:00.000-07:00

Small businesses need an abundance of innovative ideas in order to succeed in this difficult economy. It's all too easy to blame the economy, but there are many ways small businesses can succeed through customer focused innovation.

The good news is: Periods of economic stress are usually followed by new innovative ideas, especially in small business. This stems from a basic business need to retain and attract customers with what the customer perceives as value. Small businesses understand this and are able to fare better in an economic downturn because they think fast. They are in a better position to move very quickly in terms of how they align their resources and address customer needs. That's just the way they're used to doing it, in good times and bad. It all stems from the passion they have for their business and their customers.

Innovation does not come without cost. In these times, small businesses must focus on the customer, costs and cash flow. To fuel innovation, small businesses need to re-evaluate their priorities, and their business model, in order to pinpoint problems and goals to provide innovations to products and service offerings. A Cash flow crunch can sneak up on a business if they are not prepared. It can adversely affect a company experiencing a slowdown as well as one that is rapidly expanding.

In order to stem cash flow, businesses should be sure to have cash reserves or arrange backup financing. Lines of credit, equity financing, or Invoice Factoring (also known as Accounts Receivable Financing) can provide a boost to cash flow that can fuel the innovations necessary to succeed.

Now is the time for business owners to innovate and make an investment in their business. To build up a customer base that can support their efforts in an economic downturn. What may matter most is the commitment to innovative change, the tolerance for taking risks, a sharp eye on cash flow, and management's ability to lead smart.

Related Articles:
Finance Growth without a Loan Sales Down?
Stop Blaming the Economy and Increase Profits
Improving Cash Flow in Tough Times
Forbes.com Article Endorses Factoring

Finance Growth without a Loan

2009-05-20T15:01:00.000-07:00

Small to mid-size businesses are continually faced with waiting 30 to 60 days to get paid on their invoices, which really puts a strain on their cash flow.

Where large companies can usually afford to wait it out, small and mid-size businesses can’t. This can have a serious affect on managements’ ability to pay the company bill or meet payroll. A cash flow shortfall can also affect the business’ ability to fulfill orders because the cash is tied up in unpaid invoices.

How can you get business cash without a loan?

Invoice factoring, also known as accounts receivable factoring, is a financial tool that allows businesses to capitalize on the power of their outstanding invoices. This form of financing is a valuable mechanism to turn your invoices into immediate cash, enabling you to fund your business operations. It is not very well known, but invoices from strong credit worthy commercial clients are excellent collateral, especially for factors. Most banks will not accept accounts receivable as collateral, but invoice factoring firms are more than willing to provide you with financing based on them. In most cases, a factoring provider can provide funds when a commercial bank cannot.

Why use Invoice Factoring?

The reason many businesses make this move is to ensure the continuous flow of cash to the business without sacrificing equity or incurring debt. Essentially, businesses that use factoring are focusing on having most of the money now rather than all of it later. It can take time to collect on an invoice, so when a company finances its accounts receivable, they are getting their money faster and without the hassle of the collection process.
In today’s struggling economy, freeing up working capital through factoring can prove to be vital. Access to immediate cash can be invested into new equipment, used to pay bills, or used toward payroll. Of course, the alternative is to chase the customer for the invoice payment and defer everything else while the money is tied up in the collection process.

Related Articles:
Sales Down? Stop Blaming the Economy and Increase Profits
Improving Cash Flow in Tough Times
Forbes.com Article Endorses Factoring
Survey: 2009 Expected to be Rough For Entrepreneurs

Factoring: Industry's Best Kept Secret?

2009-05-15T08:48:00.000-07:00

Did you know that Invoice Factoring allows you to get a cash boost for your business, but doesn't show as debt on your balance sheet?

Find out mor at: http://www.chartercapitalusa.com

Sales Down? Stop Blaming the Economy and Increase Profits

2009-04-20T07:50:00.000-07:00

Given the current conditions, it's easy to blame the economy when sales stagnate. However, the economy may be only partly to blame.

The fact of the matter is that the holes in the sales process are hidden when the economy is good. Whether the economy is up or down shouldn't matter as much as how your sales team adjusts to the slowdown.

When organizations encounter a sales slowdown, they should adjust their game plan accordingly and not get trapped into doing more of whatever activity is not working. Management should be willing to make an investment to change their approach faster than their industry changes in order to avoid a more severe downturn.

There are no guarantees that your business will never face a sales slump, but there are things you can do to ensure your sales team has a better chance of success.

Change is Good
Change can be hard for a lot of people. However, your sales team must learn to love change as a part of your sales culture.

"Change is the law of life. And those who look only to the past or present are certain to miss the future."
- John F. Kennedy

Try to view change as an opportunity to try something new and to adapt new ideas to the current circumstances. Encourage change by challenging your sales staff to be creative with sales techniques and reward successful new ideas. If something doesn't work, encourage them to learn from the mistakes and keep the new ideas flowing.

Take Risks
If you want to be remembered, do something that makes you stand out from the pack. Although a giant purple inflatable gorilla may not fit with your company image, it is an excellent example of an "attention getter". Remember, when you're average, you're just as close to the bottom as you are to the top.

Training and Education
Encourage a passion for learning an foster an environment of self-improvement. Your sales team has talent, or else you would not have hired them. Augment your current sales program with access to self-improvement opportunities, giving your sales team the ability to become more talented than the competition.

Lead by Example
Business owners and sales managers need to approach the sales effort with the mindset that they have an obligation to continually demonstrate the kind of sales behavior, attitude, and philosophy that they want their team to employ. They should also demonstrate the principles of creativity and respect, and encourage an open and fun work environment.

Now is the time to make an investment in your sales effort. To build up your sales team that can produce in an economic downturn. What may matter most is the commitment to initiating change, the tolerance for taking risks, dedication to employee training, and management's ability to lead smart.

Related Articles:
Forbes.com Article Endorses Factoring
Solutions for Small Business Bankers
Small Business Optimism
Survival Instincts: American Small Businesses Doing What It Takes

Return to: Small Business & Factoring News from Charter Capital

Improving Cash Flow in Tough Times

2009-03-17T08:53:00.000-07:00

A common challenge for many small businesses is the feast-or-famine nature of managing cash flow. Poor cash flow can mean certain doom of an otherwise healthy business.

Beware, a cash flow crunch can sneak up on you if you aren't prepared. It can affect a company experiencing a slowdown or one that is rapidly expanding.

Here's a list of a few simple ways to improve your cash flow position:

Accept Responsibility For Minding Your Company's Cash Flow - Even if you hire an accountant to help keep the books, don't expect them to tell you everything you need to know. Stay informed and educate yourself on how best to manage your business finances.

Bill Promptly and Accurately - Billing right away for your products or services will only help to facilitate a prompt payment. Also, avoiding billing errors and mistakes will not only increase payment turnaround, but will help to build trust with your customer. There's nothing like regular billing errors to strain a business relationship.

Actively Monitor Your Cash Flow - You should always know the financial status of your business (monthly sales, expenses for the month, how quickly clients are paying, etc.).

Avoid Slow Pay/No Pay Customers - Don't be shy about checking credit references or even paying for a credit check if the client is significant enough.

Regularly Analyze Your Finances and Adjust Your Strategy Accordingly - Actively monitoring your cash flow helps catch small problems before they become unmanageable. If something is off, start asking questions until you get answers. The answers will help to define your business strategy.

Organize Backup Financing or Cash Reserves - Factoring, lines of credit or even equity financing can help get you through a cash flow crunch.

Lease Instead of Purchase - Although leasing costs more in the long run, buying on an installment basis means less cash up front and can be a boon to your cash flow.

Control Spending - Look over your expenses and see where you can trim the fat without causing the business to suffer. Add employees slowly and cautiously. Watch inventory and be careful not to over stock (this can easily bleed your company of cash).

Accelerate Receivables - Don't be shy about asking customers for advance payments and reward early payers with a discount. Just putting out friendly reminder calls ("Did you get my bill, when can I expect payment?") can significantly augment your cash flow.

Forbes.com Article Endorses Factoring

2009-02-12T08:42:00.000-08:00

A recent Forbes.com article has some excellent tips for
small businesses about managing cash flow through factoring.

URL:
http://www.forbes.com/2009/01/29/finance-factoring-debt-entrepreneurs-finance_0129_finance_print.html

The article concedes that factoring is a great way for some businesses to get immediate cash without going into debt. What most concerns factors is the credit worthiness of the end customer, not the business or its owners.

The reason many businesses make this move is to ensure the continuous flow of cash to the business. Essentially, businesses who use factoring are focusing on having most of the money now rather than all of it later. It can take time to collect on an invoice, so when a company finances its accounts receivable, they are getting their money faster and without the hassle of the collection process.

It's even more important for small businesses to free up working capital through factoring. The money can be invested into new equipment, used to pay bills, or used toward payroll. Of course, the alternative is to chase the customer for the invoice payment and defer everything else while the money is tied up in the collection process.

Survey: 2009 Expected to be Rough For Entrepreneurs

2009-01-29T11:31:00.000-08:00

According to a recent survey by the National Association for the Self-Employed (NASE), small businesses and many entrepreneurs are generally pessimistic about 2009.

In the survey, half of the respondents are already feeling the effects of the slow economy, and 43% indicated that this is the worst downturn that they've experienced.

Most of those surveyed indicated that they would use their personal savings to shore up their business, scale back the purchase of inventory or equipment, lower prices, or cut pay.

"Cash is king," as they say. Since quick access to cash is critical for small business, and access to credit is scarce at best, many business owners feel that cutting back or tapping into personal savings will provide a much needed boost to cash flow.

While most of American small and mid-sized businesses continue to struggle with the current economic environment, there is a silver lining. As we noted in a previous article "Factoring: The Small Business Loan Alternative", business owners have a little known alternative choice to a traditional bank loan, line of credit or any of the cash flow boosting mechanisms listed above.

Experts agree that, despite the economic slowdown, entrepreneurs can start and even grow their business with the right tools (See "Small Businesses Can Face Economic Downturns With Confidence").

While there is no crystal ball that accurately predicts the future, small business owners can take steps that will help their enterprises endure the worst of times, and position them for success when conditions inevitably improve.

Related Articles:
Solutions for Small Business Bankers
Small Business Optimism
Survival Instincts: American Small Businesses Doing What It Takes

Press Release: Houston Firm Offers Loan Alternative for Small Business Bankers

2008-09-29T12:04:00.000-07:00

Charter Capital ( http://www.chartercapitalusa.com), Charter Capital, a Houston based specialty financial services company, announced today that in light of the capital constraints faced by many lenders today it is doubling its capacity to provide accounts receivable funding to small businesses.

Houston, TX October 24, 2008 -- Overextended on credit lines that often were based on home equity, small businesses are increasingly hard-pressed to service debt in an atmosphere of slowing sales. “On top of limiting loans in order to maintain capital requirements, small business bankers have been pressed to tighten credit standards due to general uncertainties associated with a slowing economy” says Joel Rosenthal, Managing Director. "Many small businesses saw the handwriting on the wall months ago and were quick to warm up to the concept of obtaining funding from alternative sources such as Charter Capital.” Mr. Rosenthal suggests that bankers appreciate the synergies gained by referring “difficult to qualify” borrowers to Charter Capital for funding and related factoring services. “While Charter Capital is charged with providing funding to the business through its factoring services, incentives are given to the business referral to maintain its checking and depository business at the referring bank”.

Charter Capital is not a bank or depository. Rather, it is a specialized finance company structured to provide funding and accounts receivable management services to its clients via a process commonly referred to as factoring. Charter Capital's FactorLine services are geared to accommodate small businesses that have difficulty qualifying for conventional commercial bank loans. FactorLine services are intended to be complementary to traditional commercial banking services, leaving the bank free to concentrate on satisfying other relationship-driven services demanded by small businesses, services such as checking, payroll, and personal banking.

Headquartered in Houston, Texas, Charter Capital ( http://www.chartercapitalusa.com), provides working capital funding via a process commonly referred to as "factoring of accounts receivable", asset-based lending, and cash flow solutions for businesses nation-wide including: freight delivery and transportation, repair, maintenance and inspection service providers, consulting firms, most other service providers, staffing firms, distributors, wholesalers and manufacturers. Charter Capital also serves business in Dallas, TX; San Antonio, TX; Austin, TX; Atlanta, GA; Albuquerque, NM; Phoenix, AZ; Nashville, TN; Indianapolis, IN; Oklahoma City, OK; and cities nationwide.

Factoring: The Small Business Loan Alternative

2008-09-24T11:12:00.000-07:00

It has always been a challenge for small business owners to obtain bank financing. It’s especially true in today’s economy that most small businesses just can’t qualify for conventional business loans. The requirements can be a significant barrier: the company must have sizable assets, years of profitability and audited financial statements.

A majority of business owners do not consider other forms of business financing because they don’t know that there are alternatives to a traditional bank loan or an SBA loan. Many times they give up any hope of obtaining financing when they get turned away. The truth is that many times those alternatives can work better that conventional financing.

The biggest challenge for nearly all companies is their Accounts Receivable – the 30 to 60 day wait until the invoice is paid. During this waiting period, the Accounts Payable becomes due, employees and suppliers need to be paid. This leads many businesses into a “cash flow crunch”. While this is fine for large, well capitalized, companies with adequate banking reserves, it is a significant challenge that many business owners face every day.

There are many ways to maintain a positive cash flow when growing your business and dealing with Accounts Receivable issues. One popular way to increase cash flow is Invoice
Factoring. Invoice Factoring (also known as Accounts Receivable Financing) is the practice of selling your accounts receivable (invoices) at a discount to another company. You get the money from the company that you sold your accounts receivable to and they become responsible for collecting on the invoices.

The reason many businesses make this move is to ensure the continuous flow of cash to the business. Essentially, businesses who use invoice factoring are focusing on having most of the money now rather than all of it later. It can take time to collect on an invoice, so when a company finances its accounts receivable, they are getting their money faster and without the hassle of the collection process.

With small businesses, it is even more important to free up working capital through factoring. The money can be invested into new equipment, used to pay bills, or used toward payroll. Of course, the alternative is to chase the customer for the invoice payment and defer everything else while the money is tied up in the collection process.

As you can see, invoice factoring provides the needed working capital to meet business expenses without worrying about when your client will pay. It’s the business loan alternative that provides businesses with predictable cash flow and positioning them for growth.

Survival Instincts: American Small Businesses Doing What It Takes

2008-09-22T10:29:00.000-07:00

For all businesses, being resourceful is essential when costs rise. With the current economic conditions, many companies are finding creative ways to deal with rising costs. At the top of this list is the cost of energy and fuel. In an April survey, American Express found that 86 percent of small-business owners are feeling the effects of higher energy and gas costs.

Many business owners are using this lull in the economy to closely assess their costs and cash flow. In lean times, savvy business owners make management improvements that they have thought about for years. Discipline and resourcefulness established in difficult periods can help give business owners the tools they need to maintain their business over in the long term. Simple, but meaningful, strategies can make a big difference to the bottom line: Reviewing/revising budgets, and sticking to them; Outsourcing (payroll, accounting, HR, IT); Getting receivables in line (Charter Capital can help with that); Cutting postage and overnight fees by sending document via email; Buying used equipment for non-critical tasks.

Since approximately fifty percent of every dollar in the economy is generated by cash-starved small businesses, their effects can be felt throughout the economy. If they are unprepared and their operating expenses go up, they may not be able to pass along these costs quickly enough to keep their cash flow positive. Without proper planning and some outside help, very few small businesses have large enough cash reserves to ride out a recession.

In an increasingly competitive global marketplace, small business owners shouldn’t take anything for granted. Entrepreneurs should always be looking at ways to stay lean and efficient. No matter the size of the company, it should be a part of the “corporate culture.”

Related Articles:
Solutions for Small Business Bankers
Small Business Optimism
Small Businesses Can Face Economic Downturns With Confidence

Solutions for Small Business Bankers

2008-09-22T10:28:00.000-07:00

Charter Capital is a non-bank provider of working capital funds and accounts receivable factoring services to small businesses. Commercial bankers regularly refer to Charter Capital their small businesses customers constrained in their ability to qualify for conventional financing. By employing its factoring services, Charter Capital quickly becomes a predictable source of working capital for many such referrals.

The lending and funding problems that have beset retail banking are spreading into small-business banking as well. Overextended on credit lines that often were based on home equity, small businesses are increasingly hard-pressed to service debt in an atmosphere of slowing sales. Working capital, often held in bank deposits, is coming under strain as well.

Shifting into protective mode, banks are ratcheting up the emphasis on credit quality and core funding in their small-business portfolios. And this has created a particular problem for small-business banking officers, who are being redirected from a former bull market for loans to what increasingly is a bear market for deposits.

Problem solved
Charter Capital provides incentives to small businesses to maintain their deposit relationship with the referring bank. The banker helps the small business establish an alternative source of funding and preserves the deposit business it would otherwise most certainly lose to the competition.

American Banker: "Mood Edges Upward for Small Business"

2008-09-22T10:25:00.000-07:00

American Banker | Tuesday, August 26, 2008

"Small-business owners' confidence in the state of the U.S. economy inched upward again this month after setting a record low in June, according to Discover Financial Services.

The Riverwoods, Ill., credit card company said Monday that its Small Business Watch index rose 2.3 points, to 86.9. The reading in June was 71.8, the lowest since the index was introduced in 2006 and pegged at 100. Last month the index rose 12.8 points.

Sixty percent of small-business owners said this month that they think the U.S. economy is getting worse, down from 71% last month, and 23% said they think it is improving, the biggest share to see improvement since August 2007.

About 51% rated economic conditions as poor, compared to 54% in July; 15% rated conditions as good, up from last month's 11%.

Despite this optimism at the macro level, many small businesses are having problems at the micro level. Forty-two percent of respondents said they had experienced cash-flow issues in the past 90 days, up significantly from the 33% who said so in July.

Thirty percent said they think economic conditions for their businesses are getting better, compared to 28% who said so last month, but 44% said conditions are getting worse, up from 43% last month.

'We saw an increase in their confidence in the direction of the overall economy, but that was offset by more owners saying they're having cash-flow issues,' Ryan Scully, Discover's director of business credit cards, said in a press release. 'Their perceptions of the conditions for their own businesses were flat, making this gain harder to pin down. There is still a great amount of caution out there.'"

Related Articles:
Small Business Optimism
Small Businesses Can Face Economic Downturns With Confidence

The New York Times: "Worried Banks Sharply Reduce Business Loans"

2008-09-22T10:22:00.000-07:00

July 28, 2008

"Banks struggling to recover from multibillion-dollar losses on real estate are curtailing loans to American businesses, depriving even healthy companies of money for expansion and hiring.

Two vital forms of credit used by companies — commercial and industrial loans from banks, and short-term “commercial paper” not backed by collateral — collectively dropped almost 3 percent over the last year, to $3.27 trillion from $3.36 trillion, according to Federal Reserve data. That is the largest annual decline since the credit tightening that began with the last recession, in 2001.

The scarcity of credit has intensified the strains on the economy by withholding capital from many companies, just as joblessness grows and consumers pull back from spending in the face of high gas prices, plummeting home values and mounting debt."

Click here for the full article

Related Articles:
Small Business Optimism
Small Businesses Can Face Economic Downturns With Confidence

Weathering the Storm: Banks Continue to Tighten Amid Losses

2008-08-18T06:32:00.000-07:00

Weathering the Storm:
Banks Continue to Tighten Amid Losses

Unless you live under a rock, you have probably noticed that there is a banking crisis. Banks are continuing to struggle with multibillion-dollar losses in real estate and are continuing to tighten-up on all forms of credit. In a recent New York Times article (‘Worried Banks Sharply Reduce Business Loans’), the Federal Reserve reported that new commercial loans have seen the largest drop since 2001.

This classic "credit crunch" is leaving many businesses with the feeling that they are without a mechanism for growth. What’s more, this could leave already cash strapped businesses out in the cold.

Financial planning in today’s economic climate is the key to ensure your cash flow is healthy. Problems can be avoided with proper planning with your accountant or CPA and implementing an immediate review of internal costs. What savings can be made? Do staff numbers need to be cut? Moreover, run credit checks on customers or clients who may be a bad risk and review whether it’s worth keeping them.

Fore many businesses, the factoring of accounts receivable can be a healthy way to “weather the storm” without incurring debt. The process is simple and straight forward; and in many cases, less expensive than a traditional bank loan. Click here to find out more about Invoice Factoring

If you run out of cash before you run out of month you're in trouble; do it month after month and you're out of business. Remember: Cash is king. The management of it is the secret to success.

Related Articles:
Small Business Optimism
Small Businesses Can Face Economic Downturns With Confidence

Return to: Small Business & Factoring News from Charter Capital

Small Business Optimism

2008-07-14T15:19:00.000-07:00

If you spend enough time following the news, it's enough to make you wonder if small business can survive. Granted, things like the falling housing market and soaring gas prices are certainly real problems for everyone.

However, when you hear about some corporate-type whining that they had to give up their Starbucks because the economy's so bad, the line between real problems and a shortage of common sense becomes pretty blurry. So, is the sky really falling? According to a recent study, small business owners say no.

The study, which surveyed more than 700 small business owners with 100 or fewer employees, found that 90% said they see opportunity under current economic conditions and 75% said they expect their business to grow.

Nearly half of those surveyed said the economy levels the playing field between small business and their corporate counterparts, and 65% said they have had experience leading their business through a tough economy. 63% of those surveyed say it's about customer retention, and others say it's maintaining good cash flow, which is a big part of what drives small businesses and allows them to do well in any economy.

Small businesses are able to fair better in an economic downturn because they think fast. They are in a better position to move very quickly in terms of how they align their resources. That's just the way they're used to doing it, in good times and bad. It all goes back to the passion they have for their business and their customers.

In spite of where the economy is currently headed, America's entrepreneurial spirit has never been stronger. People are going to see that, as small businesses continue to grow and are a more important part of the economy, it will boost entrepreneurship even more.

Related Articles: Small Businesses Can Face Economic Downturns With Confidence

Return to: Small Business & Factoring News from Charter Capital

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Free Small Business Directory - Googleocity.com

Information About Invoice Factoring and Accounts Receivable Financing

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Marketing in a Slow Economy

2008-07-14T15:14:00.000-07:00

In tough economic times it is important to think beyond the current downturn and start thinking of creative ways to attract more attention to your company's products or services.
There seems to be a little less to go around these days as business owners carefully choose where they are spending. This can be an opportunity rather than a problem. Simply do what others won't. When everyone else in your market is cutting back and expressing their grief over the economy and lagging sales, you should increase your advertising.

Unfortunately, for some business owners, cutting back on advertising dollars is the first knee-jerk reaction that is employed. In difficult economic times, getting your product or service in front of prospective customers becomes increasingly important, if not vital. Here's just a few simple things that can have an impact:

Contact all your former customers - Make up any excuse to call them, but call them. They may not need you now, but they may know someone who does. Ask for referrals.

Network - Take advantage of any opportunity to get in front of a group of people to talk about what you do best. Give your business card to everyone you meet.

Offer specials or generous payment terms - There's nothing like a discount or extended payment terms to entice customers. But don't worry, if you use Charter Capital's FactorLine, offering generous terms (as long as 60 days) will have little effect on your cash flow.

Re-valuate your current advertising strategy - Make sure you're reaching your customer base, and don't underestimate the power of the Internet. Sometimes a shift from traditional advertising to on-line advertising can have a dramatic effect.

People have a lot of things on their minds these days and it's possible that your product or service is not among their top concerns right now, whether it should be or not. You should recognize opportunities to place solutions in their paths that will capture their attention, impress them, and bring them to your door.

Link Partners:

Free Small Business Directory - Googleocity.com

Information About Invoice Factoring and Accounts Receivable Financing

Invoice Factoring Blog

Factor Your Invoices Blog

Small-Business Confidence Index Down in Q1

2008-05-06T13:10:00.000-07:00

New research shows that small businesses are beginning to feel much less confident than in months past, which has affected cash flow since there has been a significant increase in customer requests to pay late during the first quarter of this year. Specifically, small business confidence experienced a moderate drop in the last few months, and confidence has continued to drop to its lowest rating since August 2006. And a staggering 76% of small businesses feel that economic conditions are not improving. Most business owners are citing increased energy costs primarily due to rising fuel prices as the major culprit.

The good news is: We can help. As we all know, cash flow is one of the most vital elements in the survival of a business, especially during difficult economic times. You can enhance your cash flow with a FactorLine from Charter Capital. When you can predict or even control your cash flow, you are in a much better position for continued business success even during an economic downturn.

Although today’s economic news can be cause for concern, this should not stop you from trying to look for opportunities for stability and growth. Practice caution, but always be optimistic about positive changes and be open to opportunities that come your way.

Remember: The economy as a whole is generally out of your control. Still, you should keep in mind that things are what you make of them.

Related Articles: Small Businesses Can Face Economic Downturns With Confidence

Return to: Small Business & Factoring News from Charter Capital

Small Businesses Can Face Economic Downturns With Confidence

2008-03-10T10:58:00.000-07:00

Dealing with an uncertain economy is never easy, especially for small businesses. Unlike their larger counterparts, small businesses rarely have the resources to monitor and take corrective action for every trend and issue. And even those owners who have weathered numerous business cycles may be faced with new circumstances that confound their otherwise successful instincts and knowledge.

While there is no crystal ball that accurately predicts the future, small business owners can take a number of steps that will help their enterprises endure the worst of times, and position them for success when conditions inevitably improve.

In the face of the ongoing credit crunch, consider an alternative to borrowing funds from a commercial bank.
Consider a funding line from Charter Capital, a preferred provider of accounts receivable factoring services. Charter Capital has vast experience in economic cycles, and can advise you on issues specific to your business and industry. It may be helpful to arrange for a factoring or funding line. You may not need it for several months or at all. But if a lag in cash flow occurs, you will have a ready source of bridge money in place.

Make sure you have good relations with your vendors.
You may find it necessary to renegotiate terms, but overdue bills and inconsistent payment practices will not help your position. What’s more, your vendors may be experiencing financial difficulties as well. Any flexibility will hinge on whether they perceive you as a reliable partner, or a risk. A factoring or funding line from Charter Capital will help establish you as a reliable partner.

Similarly, keep a close watch on your receivables.
Follow up with whoever owes your company money and make sure they are meeting their terms. Be firm when dealing problem accounts, but also be willing to negotiate where appropriate. It may take only a matter of months for a struggling customer to become a highly stable source of income. If you can accommodate such situations without adversely affecting your company’s financial position, everybody wins. A factoring or funding line from Charter Capital will give you the freedom to extend even more generous payment terms to your valuable customers.

Step up your marketing efforts.
Many businesses mistakenly see marketing as a luxury when money is tight. The truth is that this is the time you need marketing most. Along with reassuring your current customers that you are still there to serve them, marketing can help you reach new markets that will sustain your business now, and facilitate its growth in the future. A factoring or funding line from Charter Capital will give you peace of mind to accelerate your marketing effort knowing that that increased sales can be supported by funds.

Make sure expenditures can be justified, and that they contribute to the financial health of your business.
You may find it necessary to redirect money to areas that will enhance business performance. If you carry an inventory of products, check the accuracy of your records and procedures to prevent losses. Do not feel pressured to hold down sales for lack of inventory. A factoring or funding line from Charter Capital will give you freedom to invest in even more inventory than you might otherwise be able to afford.

Review your operations and expenses on a regular basis.
If you monitor your profitability on a monthly basis, it’s a good idea to do it weekly or biweekly during slow economic times. Likewise, review your business plan more often. Monthly or quarterly reviews will make it easier to make adjustments and keep your business on track. A factoring or funding line from Charter Capital will give you a certain amount of flexibility in meeting your cash obligations. Obtain cash to negotiate prompt pay discounts with your vendors. Meeting your payroll and payroll tax obligations on a timely basis will most certainly save you additional expense.

Return to: Small Business News from Charter Capital

What to Tell Your Clients When You Decide to Use Factoring

2008-03-03T12:27:00.000-08:00

Through years of experience we understand that one of the biggest questions business owners have about factoring is: "What do I tell my clients?" or "How do I let my clients know that a factor is involved?"

This boils down to a real concern that clients may get confused or misunderstand the factor's role.

At Charter Capital, we have come up with a few tips for what to say to your clients to make them comfortable with your decision to factor your accounts receivable invoices.

Most importantly, this helps to position your decision properly right from the start.

Factoring with Charter Capital helps me to expand my business by enabling growth.
Factoring invoices (accounts receivable) to Charter Capital is a standard business practice for many companies. It's important to know that our business is not in trouble, but growing. Factoring with Charter Capital is fueling that growth by accelerating my cash flow.
Your day to day contact with our Company will not change.
I will continue to be the person you contact regarding project related issues.
Your payment terms will stay the same.
Working with Charter Capital is simple.
You will receive invoices that involve Charter Capital. Instead of mailing a check to our business, you simply redirect payment to Charter Capital.

It’s just like anything else in business: you set your client's expectations. How you choose to deliver the decision to factor your invoices will shape how your clients perceive the news. And to your clients: it's just business as usual, except for where they send their payments.

Return to: Small Business News from Charter Capital

"Smaller Lenders Feeling Squeeze Of Credit Crunch" - The Wall Street Journal

2008-02-25T07:01:00.000-08:00

"Smaller Lenders Feeling Squeeze Of Credit Crunch" - The Wall Street Journal

Factoring from Charter Capital is your Alternative when lenders say "No"

As banks continue to "tighten up" their lending practices due to continued pressure from federal and state bank examiners, small business owners are finding in increasingly difficult to secure the financing they need to grow their business.

The Difference Factoring Makes An increasingly popular way that small business owners secure capital for their growing business is factoring. Factoring (also known as Accounts Receivable Financing) is the practice of selling your accounts receivable (invoices) at a discount to another company like Charter Capital. You immediately get the money from Charter Capital and we collect on the invoices.

It is important for small business owners to know that factoring is not a loan and will not show up as debt on the company’s balance sheet.

With factoring, you are free from many of the restrictions placed upon your business by traditional bank financing such as loans or lines of credit. Most importantly, with factoring, you are free to grow without having to give up equity or control of your business. This is because factoring your Accounts Receivable is technically the sale of an asset, and the funding you receive from us is not debt, but a cash asset.

In today's competitive marketplace, getting debt-free funding in the form of factoring can give businesses the edge they need to succeed.

Return to: Small Business News from Charter Capital

Raising Capital- If You Want To Raise Cash, Try Factoring

2008-01-25T06:55:00.000-08:00

Here's what usually happens on the search for capital for your business:First you call Uncle Mike. When his money runs out, you tap a few private lenders - old rich guys with nothing better to do.

Next, a bank might make you a loan or issue you a line of credit, which is much harder to accomplish these days because banks have really tightened-up in the past few months.

Raising money is difficult and time consuming, and most small businesses fail because they run out of cash. Getting additional capital in smaller chunks will get you the cash your business needs without risking a loss of equity or ownership.

Factoring may be the answer to many business cash flow issues. Gaining in popularity, factoring (also known as Accounts Receivable Financing) is the practice of selling your accounts receivable (invoices) at a discount to another company. You get the money from the company that you sold your accounts receivable to and they help you collect on the invoices.

The reason many businesses make this move is to ensure the continuous flow of cash to the business without sacrificing equity or incurring debt. Essentially, businesses that use factoring are focusing on having most of the money now rather than all of it later. It can take time to collect on an invoice, so when a company finances its accounts receivable, they are getting their money faster and without the hassle of the collection process.

With small to mid-sized businesses, freeing up working capital through factoring can prove to be vital. The money can be invested into new equipment, used to pay bills, or used toward payroll. Of course, the alternative is to chase the customer for the invoice payment and defer everything else while the money is tied up in the collection process.

The lesson here is: Working capital in-hand today is better than dashed dreams tomorrow.

Return to: Small Business News from Charter Capital

Small Business Emerges as Trouble Spot for Bank of America

2008-01-08T08:43:00.000-08:00

Charter Capital can assist with asset transition (meaning workouts) and do not forget that Charter Capital has earned its reputation by assisting small businesses when other financial providers could not.

Bank of America Corp. said credit deterioration is beginning to spread beyond its consumer operations into areas such as small-business lending.

Joe Price, the $1.72 trillion-asset Charlotte company's chief financial officer, said during a conference call Tuesday to discuss its weak fourth-quarter earnings that the company is taking actions to curb the rise of problematic small-business loans. Net chargeoffs in that area jumped 17% from the third quarter and 141% from a year earlier, to $277 million. At 6.33%, the loss rate there was higher than even that of B of A's credit card portfolio.

Nonperforming small-business assets rose 39% from the third quarter and 71% from a year earlier, to $135 million. B of A joined Wells Fargo & Co. in San Francisco this earnings season in reporting deteriorating credit quality among small-business clients. Like Wells, which reported last week, B of A cited business credit cards. Mr. Price said its issues stem largely from business card accounts opened in 2005 and 2006, though his company has taken several steps to address the issues, including offering smaller credit lines, changing direct mail offers, and using more judgmental lending techniques. As a result, credit scores are on the rise, and there has been "a meaningful drop in approval rates."

In an interview after the call, Mr. Price also said that other "consumer-dependent" areas are expected to have deteriorating credit quality this year, with retailers being the most likely victims. Though he did not take an alarmist tone, he said that credit deterioration "could be a little broader" than just in consumer areas.

Credit quality will play a key role in B of A's efforts to meet its full-year earnings guidance. Those efforts also will rely heavily on avoiding another capital markets lockdown and a prolonged recession. However, the company commented very little on its plans to buy Countrywide Financial Corp. in Calabasas, Calif., beyond saying that it expects the deal to be operationally neutral to earnings this year.

"Nothing has changed" since B of A announced the $4 billion deal this month, Mr. Price said during the interview. However, he also said buying Countrywide would affect earnings when it comes to raising the capital needed to support the acquisition and return Tier 1 capital to his company's 8% target. B of A is looking into a preferred stock offering, he said, perhaps with a convertible element, though that could knock about 10 cents a share off its full-year earnings; that has been factored into its guidance.

Kenneth D. Lewis, B of A's chairman, president, and chief executive, told analysts during the earnings conference call that he expects his company to report earnings "well above" $4 a share for this year. He also said that such a mark would be achievable "absent a market disruption event like we experienced in 2007." As the call continued, there were more stipulations to the forecast. Mr. Lewis said the guidance takes into account expectations of "very modest growth — virtually none — in the first half of the year" in the U.S. economy before a return to 2% growth at yearend. In response to a question, he said that the projections could withstand a "mild, short-lived" recession but could suffer in the event of a prolonged downturn.

In response to another question, Mr. Price said that credit quality would be a "soft spot" that could hold the most negative surprise, in terms of both loan losses and the possibility of another capital markets crisis.

There was some skepticism over the full-year earnings guidance, which would represent at least a 21% rise from last year. Michael Mayo of Deutsche Bank Securities asked Mr. Lewis during the call whether the projection could hold up, given B of A's core operating trends during the fourth quarter, where its earnings fell 95% from a year earlier, to an anemic $268 million, or 5 cents a share. The results were 13 cents below the average analyst estimate, according to Thomson Financial. (The company could have reported a loss had it not been for a $1.5 billion gain from selling Marsico Capital Management LLC.) Mr. Lewis responded by saying that the most significant lift would come from the Federal Reserve Board's continued preference for lowering the federal funds rate, including the 75-basis-point emergency cut announced Tuesday.

In an interview, Mr. Price said that the fourth-quarter earnings, excluding the $5.3 billion of writedowns tied to collateralized debt obligations, "were pretty strong." However, analysts also expressed heightened concerns about credit quality. Though the fourth-quarter loan-loss provision of $3.31 billion was in line with projections B of A provided last month, analysts drew attention to nonperforming assets, which rose 76% from the third quarter and 220% from a year earlier, to $5.95 billion. Mr. Lewis said during the call that most of the problems in home equity have centered on high-loan-to-value loans, "principally in states that have experienced significant decreases in home prices." However, the residential mortgage portfolio "continues to perform well."

Mr. Price said during the conference call that B of A's loan-loss provision for this year could rise 20% from the $8.39 billion it set aside last year.

Return to: Small Business News from Charter Capital

Live Your Dream - Mike Barrera

2007-12-18T07:39:00.000-08:00

Mike Barrera, President and CEO of the U.S. Hispanic Chamber of Commerce, discusses why there's never been a better time for Hispanics to explore the opportunities of entrepreneurship.

Founded in 1979, the U.S. Hispanic Chamber of Commerce promotes the economic growth and development of Hispanic-owned businesses across the country, and serves as the umbrella organization for 200 local Hispanic chambers.

Q: How widespread are Hispanic-owned small businesses today?
A: Hispanic-owned businesses represent a very dynamic area of the U.S. economy. There are now more than two million Hispanic-owned businesses, running the gamut from engineering, legal, financial, contracting, retail and many other types of businesses. Even more encouraging is the rapid growth of women- or Latina-owned businesses. By the end of the year, we expect there will be 800,000 of them.

Q: Given recent Hispanic population growth, is it easier to go into business?
A: Being in an area with a large number of Hispanic residents does present new opportunities to serve that market. But to get started, a Hispanic entrepreneur must still go through the same steps as any other small business owner—do the necessary planning and research, follow all the state and local rules, have financing for six to eight months and hire employees.

Charter Capital is a proud member of the Houston Hispanic Chamber of Commerce.

Return to: Small Business News from Charter Capital

Do You Have An Alternative If Your Lender Becomes Uncomfortable With Your Credit?

2007-12-08T06:29:00.000-08:00

Charter Capital - Factoring Made Simple

Read this Entrepreneur Magazine article first (click here).Unfortunately, Tara Olson's story is not unique. Banks will often drop your line of credit if it does not meet certain profitability requirements. This, of course, can leave your business scrambling for cash if you are dependant on bank financing or a line of credit to help buffer your cash flow.
The Importance of Cash Flow As with most businesses, cash flow is critical to ensure funds are available to meet your operating needs. Without effective cash flow management, a business faces several problem areas, such as cash shortages, inability to pay bills, bankruptcy, or even business failure.
Cash flow is one of the most vital elements in the survival of a business, and it shows where a company may be headed. Instead of depending on traditional bank financing, you can more easily manage your cash flow with a FactorLine from Charter Capital. When you can predict or even control your cash flow, you are in a much better position for continued business success.
The Difference Factoring Makes An increasingly popular way to help manage cash flow is factoring. Factoring (also known as Accounts Receivable Financing) is the practice of selling your accounts receivable (invoices) at a discount to another company like Charter Capital. You immediately get the money from Charter Capital and we become responsible for collecting on the invoices.
With factoring, you are free from many of the restrictions placed upon your business by traditional bank financing. Most importantly, with factoring, you are free to grow without having to give up equity or control of your business. This is because factoring your Accounts Receivable is technically the sale of an asset, and the funding you receive from us is not debt, but a cash asset.
In today's competitive marketplace, getting debt-free funding in the form of factoring can give businesses the edge they need to succeed.

Return to: Small Business News from Charter Capital