GE Finance

Archive for January, 2012

Insurance is a necessary yet often costly requirement that individuals and business simply cannot be without. Being without insurance could cause you to face significant financial losses, and possibly getting into trouble with the authorities. As with everything else, you can often find great deals in insurance by shopping around and online business insurance is a very good way to shop around indeed.

In Your Own Time

The great thing about looking for anything online is that you get to do it when it suits you best. If your day is so hectic that you can’t find the time to see an insurance broker, you could instead to do so when they day is over and you have more time on your hands. You can shop around with online business insurance no matter what the time of day is so when you shop is entirely up to you.

Finding a Good Broker Online

With a little shopping around online you should be able to compile a shortlist of options, from which you can choose the broker you feel is best. A good broker found should be able to offer you a wide range of products and find the best deal for you. With online business insurance you should find that most of the hard work is done for you.

The tightening of the traditional sources of working capital started in 2008 and has never really loosened since this time. Many banks, supposedly bolstered by US government loan guarantees are supposed to be lending to small business once again, but the reality is much different. While the government can guarantee loans to small business against default, they cannot compel a lending institution to lend to them.

Into this gap have stepped many different alternative working capital solutions that can still provide a business with the sources of working capital they need. However, it is important for any business to know that these sources of working capital can carry risks. Below is a list of some of the common sources of working capital that are available right now:

1.) Merchant Cash Advance – This source of financing is not technically a loan, but rather, an advance against future credit card receipts. Most cash advance lenders require that the merchant process a minimum each month in credit card receivables. They then advance a portion of this going forward at a discount to the merchant. In other words, they may purchase $14000 worth of future credit card receivables for $10000. So the business in this scenario gets the $10K upfront, and pays back $14k over the next 6 to 9 months. Most of these advances are short term, and payable daily after each credit card batch automatically 5-6 times per week depending on the source. While these advances can work with tough credit situations, remember that high rates and fees are normal as this type of advance is not regulated by state usury laws governing maximum rate. Watch out for rates as high as 70% and upfront fees to apply as well as requirements to switch processors and possibly buy new swipe equipment.

2.) Credit Express Business loan- Similar to the cash advance with respect to its ability to handle tougher credit situations, this loan features rates that are 30-50% lower than a merchant cash advance with no upfront fees or requirement to switch credit card processors or pay for new equipment. As a true business loan, this product will allow borrowers down to a 550 FICO and maximum loan amounts of $250k. Documentation is minimal with no business plan required and a short application. Normal Funding time is 2 weeks or less.

3.) SBA backed loan- The SBA is far and away the best choice for working capital when it comes to rates and fees. Recently, the Obama administration raised the government default guarantee available to banks to as high as 90%. Theoretically, this should encourage banks to lend more on these types of loans, but so far, the data doesn’t bear that out. Even so, if you have time and sufficient documentation, this is the best way to go for most small business. Be sure to plan on a lengthy application and a requirement for 3 years P & L as part of the application process. However, it can be worth it if you are able to get approved. If credit is an issue or you need the money quickly, this option may not be the best for you. Startups also may have an option with the SBA’s micro loan program. Click on the link below for a free SBA buyers guide and full information.

Hopefully, this gives you some key insights on what you need to know for you working capital needs. Want to know more on flexible working capital solutions? Check out the link below.