by Bold Growth Solutions | Jun 27, 2021 | Blog
Starting a new business or expanding your business costs money and one of the biggest challenges facing business owners is getting the money they need. The business financing landscape is large and it’s hard to find the right method without some major research. One option that many businesses choose to cover everyday expenses is a working capital loan.
Working Capital Loans Explained
Loans are typically categorized based on what they are going to be used for. A working capital loan is used to fund the day-to-day operations of a business. They are often used for payroll, debt payments, and rent. They can also be used by the business during the slow season to cover immediate expenses.
A cash flow loan has some similarities to working capital loans, but are approved based on the past and future cash flow projections for your business. You typically don’t have to put up any collateral and the approval process takes just a few hours. This is a very flexible option compared to some of the other business funding options. However, you’ll want to be sure that you’re aware of the interest rate (often high) and be sure that you and your attorney read through the agreements before you sign.
Who Provides Working Capital Loans?
While there are some banks that offer working capital loans, you’ll typically find an online provider offering the best terms and easy qualifications. A bank will usually have a much more stringent approval process to go through and you’re less likely to get a quick approval.
How to Increase Your Working Capital
The term “working capital” refers to when your assets are greater than your liabilities. If you want to increase your working capital, there are a few options:
Borrow money
Sell long-term assets
Replace short-term with long-term debt
Choose vendors that offer discounts
Analyze fixed versus variable costs
Manage inventory
Learn about tax incentives
Keep financials current
Many businesses struggle with increasing their working capital. If you’ve exhausted all of the above options for increasing yours, it might be time to consider looking at working capital loans. When you decide that you want to explore this options, contact Bold Growth Solutions to help.
by Bold Growth Solutions | Jun 24, 2021 | Blog
In the news, you’ll often hear economists talking about how consumer credit is up or down and what that means for the economy as a whole.
Generally, when people have more disposable income, they tend to buy more stuff – both by using cash and by using credit cards and loans. That is a sign of a healthier economy. When spending and borrowing drops, that’s a sign that times are tight.
Other people’s spending habits don’t really impact you, as a consumer. But understanding how credit works while responsibly managing your debts is very important. Here are some tips and additional info.
Benefits of Consumer Credit
First, know that debt isn’t necessarily a bad thing. Unexpected expenses – such as a broken water pipe, leaky roof or car breakdown – can come up suddenly and throw your finances into chaos.
Ideally, you’ll have extra cash saved for these emergencies, but that isn’t always possible. This is where credit can come to the rescue. By using your credit card, you can fix your home or car and be back to normal in no time.
Managing Your Credit Score
Your ability to borrow money is based primarily on your credit score and credit history (which reflects in your credit report). A score above 700 is excellent, while a score below 500 can be a sign that your personal finances are in serious trouble.
Ways to Improve Your Credit Score Include:
Paying all your bills on time
Paying down your credit card balances
Avoiding collections and delinquencies
Utilizing a variety of consumer credit products (e.g. credit card, auto loan, mortgage)
Paying Down Your Debts
Paying off your debts can save you a lot of money in interest, and it can even improve your ability to borrow larger amounts in the future for a car, a home or other expenses.
One of the best strategies for paying down multiple loans and credit cards is The Snowball Method (think of a small snowball rolling downhill and growing larger as it goes).
After making minimum payments on debts, add a little extra to the credit card with the lowest balance. Continue every month until that card is paid off completely. Then add the amount you were paying for that card (minimum payment plus the extra money) to the card or loan with the next lowest balance every month.
As you pay off those cards and loans, the amount you’re able to pay increases (snowballs), allowing you to pick up speed and pay down the last accounts very quickly.
If you have any questions about the best consumer credit products for you and how to manage them, contact Bold Growth Solutions for info.
by Bold Growth Solutions | Jun 17, 2021 | Blog
Money is a big concern for any business. When it comes to money, most businesses will have two primary things to worry about, cash flow and usable or working capital. However, these are often confused by business owners. Read on for a definition for each one, their differences, and how to improve their values.
Cash Flow
your cash flow is the money that flows into your business and out. Positive cash flow, the desired goal, is when more money comes in than goes out. On your cash flow chart, you should see various incomes and expenses, such as sales, operating costs, asset sales, collection of outstanding accounts, and payments to suppliers.
While this seems simple enough, many business owners focus too much on the money coming in. Worse, they confuse the total amount coming in as profit. While you want to have more money coming in, it doesn’t mean that all of the money coming in is going towards your profit.
Usable Capital
Usable or working capital is the amount of money or assets that your business has in the bank. This can easily be calculated by deducting your liabilities from your current assets. A negative result is a bad sign because it can indicate that your business is in debt. When you need more immediate capital, you have options such as getting a loan, increasing your profit, or finding another source of immediate funds.
The Connection
You can create a healthy cash flow and still have very little capital on hand. This is because you can have a lot of money coming in, but you can also have many financial obligations. Meanwhile, you can also have a lot of capital on hand without much cash flow.
Boosting Cash Flow
When you want to boost your cash flow, make sure you collect all outstanding invoices for your company. For instance, you can set firm boundaries that will encourage customers to pay you promptly. You could also create incentives for getting staff to help collect payments on time.
Increasing Usable Capital
To increase the amount of capital you have on hand, you can reduce the amount of money you have going out. For instance, you can work with a lender to decrease your loan payments. You could also try to delay loan payments for as long as possible.
If you are a business owner, you need to understand the difference between cash flow and usable capital. This can help you bring more revenue into your business so you can succeed.
by Bold Growth Solutions | Jun 10, 2021 | Blog
The medical industry is busy providing health care for its patients. However, a lot of time is also spent processing invoices from doctors and billing insurance. This takes time away from helping patients and is why healthcare financing is a fantastic solution for this industry.
What Is Accounts Receivable Financing?
Accounts receivable financing is a way to help healthcare providers secure money to run their business without waiting for patients or insurance companies to pay their bills. Since most medical bills are costly, patients tend to put them off, sometimes for months at a time. This delays the provider from receiving their payments on time, which hurts overall growth.
In accounts receivable financing, a financing company purchases the debt from the medical provider and pays them 80% to 95% of the amount owed. Usually, a small processing fee is charged as well. The remaining balance is used as a buffer if there are any problems with incorrect billing or if some bills don’t get paid. The reserve is returned to the provider once payment has been received.
This type of financing is not a loan but a cash advance on funds that normally take 30 to 60 days to receive. The financing company then has the responsibility of collecting the debt from the patient and the insurance company. This means that caretakers can focus on their patients and not on billing and paperwork.
Why Is It Beneficial for the Medical Industry?
There are many advantages for medical offices when selling off their debt. Here are a few of the ways this benefits them.
- Money is made available to the doctor’s office within a few days.
- By paying suppliers on time, many practices qualify for discounts, keeping long-term pricing down.
- Having funds readily on hand makes it easier for medical providers to hire and keep good staff.
- A steady supply of cash allows medical offices to expand as needed and purchase new and improved equipment when available.
- The billing process is very efficient, using up-to-date software systems that allow tracking and collections.
- This financing is available for many different medical professionals, including hospitals, physicians, oral surgeons and treatment centers.
Being able to care for patients is the top priority for medical providers. Accounts receivable financing allows for this opportunity by taking away the time-consuming responsibility of the billing process. It also provides businesses with cash to provide the best level of care instead of waiting for delayed payments.
by Bold Growth Solutions | Jun 10, 2021 | Blog
The ongoing struggle for balance between consumer privacy options and ad personalization is having impacts on Search Engine Optimization for local traffic. With services like Google Maps offering the option to turn off location tracking, local SEO techniques can suffer a loss of information. There is hope, however, as free platforms strike a balance between valuing customer privacy and generating ad revenue through personalization.
Ad Personalization Versus Consumer Privacy
Websites, internet browsers and social media platforms gather information from users about interests and locations to show them targeted ads based on products or services they have looked at in the past. This can help consumers find what they are looking for as well as keep marketing budgets lower and ad campaigns more effective. This targeted marketing technique has led to memes and complaints about mentioning the need for a new car and then seeing advertisements for new cars on social media, in emails or on a blog site.
While companies and some consumers find ad personalization helpful, privacy issues surrounding the gathering and use of personal information persist. Local SEO techniques, for example, use location tracking to show you advertisements from car dealerships in your area because those are more relevant, but using the incognito mode for Google Maps means that your location is not saved and cannot be used in targeted marketing campaigns.
What Is the SEO Impact of Finding Balance?
Finding the balance between ad personalization and consumer privacy is a struggle that is likely to take quite some time with the court system and government weighing in. So far, companies are offering the option to opt-out of some information gathering with features such as incognito searches and more detailed privacy settings, but most consumers are not taking advantage of it. This means that your SEO and targeted marketing campaigns will continue to function much as they have been. When optimizing for local traffic, it is also important to remember that most people will include location tags in the keyword to find items they can purchase immediately instead of waiting and paying for shipping. This means that your site will rank higher in searches for nearby customers when you optimize locally.
Local SEO techniques have been building on the information gathered for ad personalization to generate more targeted keywords and marketing campaigns. The rising concern for consumer privacy has put many of these things in question and finding the right balance between privacy and personalization seems like a never-ending struggle. As this balance is achieved, it is important to remember that many consumers will opt-in for location tracking to find what they need quicker and more easily.
by Bold Growth Solutions | Jun 3, 2021 | Blog
There are times in a business lifecycle that cash is not easy to come by. Fortunately, there are numerous types of lending arrangements to assist businesses in every stage to receive the infusion that they need to grow. Asset-based lending is when an asset is used to secure a loan, and it is very useful in specific situations.
For businesses that have fixed assets but little cash flow, this type of loan makes use of what the company already owns to bring in much-needed liquidity. Busineses that are growing quickly are an example of the type of business that can benefit from this type of financing. Small businesses are another example. Businesses that have less than desirable credit are also prime candidates for asset-based loans. In addition, it is very common to see individuals engage in this type of financing to obtain short-term cash in exchange for material assets that they don’t currently need or use.
For all of these situations, utilizing assets as leverage for financing has a number of tangible benefits.
Leveraging Assets
A company that has fixed assets on their balance sheet such as inventory, accounts receivable, securities, or property, plant and equipment (also known as PPE), can put those assets to work as leverage to secure additional capital. A business must weigh whether the assets are expendable in case the loan is defaulted on, but if the cash infusion is more important, then it is wise to use those assets to obtain it.
Relatively Easy to Obtain
It is easier for a business to obtain an asset-based loan than other type of financing because the lender uses the asset as collateral to secure the loan, making it a relatively low-risk arrangement for the lender. For new businesses or businesses with low credit ratings, this type of financing is often a life-saver.
Flexibility
Asset-based lending programs offer a great deal of flexibility as opposed to other loans. The funds can be used virtually any way the borrower chooses, as long as it’s related to the business. Because the funding is tied to the business’s assets, as their value grows the funding can be increased, which may be an additional benefit to the borrower.
Comparatively Low Cost
Because of the low-risk associated with loans that are secured by business assets, lenders are able to offer them at a discount. While these loans are financed using an annual percentage rate, they are often offered at a full percentage point lower than similar financing alternatives that are considered to be higher risk.
