Small Bank Crisis

The Crisis Facing Community Banks and the Small Businesses Who Rely on Them

16:13 21 August in Blog

Publicly traded banks recently hit record stock prices. The sudden increase in value was dubbed the “Trump Trade” because investors believe his policies will be positive for a growing economy and banks would—and should—be at the center supporting such an economy.

Since the election in November, bank stocks have risen around 24% and continue to remain positive as larger banks remain hopeful of soon to come tax reform and new regulatory relief.

What is seldom covered in the news is the negative impact that Dodd-Frank, aka “Too Big to Fail”, legislation is having on the community banking sector all across America. While activists touted this legislation as a safeguard for consumers, little thought was given to the effect on smaller organizations.

When the law was enacted, there were no provisions that discriminated by the size of a bank. The legislation, which included over 2,000 pages of reforms and regulations that all banks were required to implement, put a huge strain on the community banks to meet these blanket compliance standards.

The regulations were applied evenly to all banks, causing smaller community banks to have a higher regulatory burden than their multibillion-dollar competitors. The cost of compliance for community banks has led to a growing trend of mergers to bulk up and become larger regional banks.

What is Happening to Small Banks?

Midsize and larger banks are experiencing increased positive growth in accumulating assets and increased loan production to companies that meet all of the risk criteria outlined by Dodd-Frank. At the same time, community banks are struggling to meet the cost of compliance with the new regulatory scheme.

In order to cover the cost of compliance, small community banks are merging and are becoming regionally positioned banks to reduce the cost of compliance and overhead. Although this may be good for the banks as they are better able to handle the costs associated with compliance, it is a negative trend for small businesses as it limits their access to banking services and credit.

In most cases, the headquarters of the smaller bank is absorbed by the acquiring entity and the bank loses its proximity to the local business community.

Dodd-Frank made it almost impossible for smaller companies to borrow from the bigger money center and regional banks because of the risk rating system required by the legislation. The last bastion of hope for small businesses was the community bank.

Community banks are generally formed by successful members of a local community who pool their capital together to support and invest in their local community. When these institutions are forced to grow by regulatory forces, they often change their mission as they have a number of competing constituencies throughout their new region. While the merged bank may remain in the community, their mission frequently changes and the loans they make—or are willing and able to make—changes.  All of these changes are negative for the growing small businesses that have historically relied on the community banker for their financing needs like working capital, equipment leases, real estate loans etc.

Dodd-Frank policies have led to numerous mergers, allowing midsize banks to take over the operations of community banks. Larger bank take-overs means a change in business practices for the community banks involved in said mergers. In many instances, there are complete staff turnovers, and larger banks simply do not personally know the local markets and the small businesses previously involved with the community banks.

Currently, President Trump has ordered a review of the Dodd-Frank regulations by Treasury Secretary Steven Mnuchin. Hopes are high in favor of a reform involving less complex regulations, but it is unclear what will actually come of these talks and how any alterations will affect the community banks and, in turn, small businesses.

This Negatively Affects Small Businesses

Historically, small business owners developed long-lasting relationships with community banks and relied on those personal connections to receive desperately needed funding and capital support larger banks would never consider providing.

Community banks have modernized their lending operations—as all financial institutions have—though they rely on the five C’s of credit: Character, Collateral, Capacity, Capital, and Conditions. With the new mergers, the larger banks heavily utilize algorithms that take these variables into account, as well as others, but it is not the same as a loan officer who lives in the community he lends to and who may be aware of a small business, its impact on the community, and the character of the owners.

Displacing small businesses from the bank puts these businesses in difficult situations. Many rely on the attentiveness and support of the community banks they use to maintain their liquidity and competitive advantage in the market in which they compete. However, with the decreasing number of community banks and the lack of access from midsize banks, these small businesses have very few places to turn for help.

This is Where Capstone Comes In

Capstone has seen a significant increase in clients who are seeking factoring and purchase order financing as a result of the community bank merger phenomenon. “The Castaway loans, those where the bank advises its client that it has three to six months to find a new lender, are increasingly crossing our desk”, said Joseph F. Ingrassia, Managing Member of Capstone Capital Group, LLC.

Castaway loans are typically larger than your average factoring transaction and require cooperation from the bank casting off the loan and the client. In many instances, the bank has to convert a portion of the revolving inventory and accounts receivable loan into a term loan to facilitate the client’s exit while Capstone pays off the preponderance of the revolving credit facility with a new factoring facility.

To accommodate these loans, Capstone has skilled staff that negotiates with banks to ensure they cooperate with our new clients and receive the substantial pay-down the bank is seeking. Term loans are rated differently than revolving credit facilities and are in terms of risk ratings under Dodd-Frank. Our staff understands Dodd-Frank regulations and what a cast-off bank can and cannot do. Successful negotiations result in a settlement that ensures the bank gets paid in full, the client’s business is not impaired, operations are not interrupted, and the new facility we put in place is sufficient to support the growth of the company for the next 12 to 24 months.

Thankfully, other options like factoring and purchase order financing help fill the gap and ease the burden of transferring debt to another lender by providing small business owners with vital cash flow quickly.

Capstone Capital Group, LLC specializes in providing business owners with options. Our factoring and purchase order invoicing services allow qualified business owners to gain access to necessary cash flow faster so they can stay afloat and remain competitive.

If you’re ready to learn more about the options available to you, call us today at 212-755-3636 or contact us online www.capstonetrade.com.

 

Merger articles

https://globenewswire.com/news-release/2017/03/27/945580/0/en/Two-of-the-Best-Banks-in-America-Join-Forces-in-Bank-Merger.html

https://globenewswire.com/news-release/2017/04/11/958795/0/en/Sussex-Bancorp-Announces-a-Merger-With-Community-Bank-of-Bergen-County-NJ.html

https://globenewswire.com/news-release/2017/03/23/943784/0/en/Northwest-Bancorporation-Inc-to-Acquire-CenterPointe-Community-Bank.html

http://www.mbvt.com/about-us/community-bank-merger/

Why mergers are big now

https://www.americanbanker.com/news/bank-m-as-super-shoppers?tag=00000151-16d0-def7-a1db-97f03ca50000

Resulting issues for small businesses

http://www.freep.com/story/money/small-business/2017/02/12/community-banks-hopeful-lawmakers-target-financial-rules/97690526/

https://www.icba.org/news-events/latest-news/2017/05/01/more-than-100-icba-community-bankers-meet-with-president-trump

Ways to keep Debt under control by Capstone

Getting Business Debt Under Control

09:00 08 August in Blog

One of the many reasons business owners are unable to grow their business is because they have too much existing debt. This can mean they are unable to borrow the funds they need to expand. Whether expansion involves new equipment, hiring new employees, or upgrading facilities, strong cash flow, and lower debt makes a difference.

Evaluate Your Current Debt

The first step in getting your debt under control is to understand the type, maturity, and cost of your current debt. Business owners who have resorted to using credit cards as an additional credit source could be paying in excess of 20 percent in interest. Create a table of the balance, interest rates, and monthly payments so you know exactly what you are facing.

Create a Plan

One of the first things you should consider is speaking with your creditors. Credit card companies, banks, and vendors are often happy to discuss terms with you before you start facing difficulty paying your debts. Here are some common tips:

  • Credit card and bank loans — consider asking for interest rate reductions. This may be effective if you have a good payment history, and if you have offers from other companies for your business. Additional offers can be used as a bargaining tool.
  • Talk to your vendors — if you have good relationship with your vendors, ask about changing payment terms. If you are currently paying invoices on a Net-15 basis, try to get a Net-30 agreement. This may give you more buying power, allow you to generate extra business, and give you some breathing room.
  • Discuss all aspects of financing — bank loans, lines of credit, and other similar loans often have a personal guarantee attached. You may be able to negotiate this out, change the amortization for a loan to reduce monthly payments, eliminate prepayment clauses, or change due dates to be more in line with your cash flow.
  • Consolidation of debt — if you have multiple lines of credit, or outstanding loans, look into the possibility of rolling the balances all into one loan. This could mean one monthly payment instead of several, and you may also be able to get a reduction in interest rates, or better terms.

Saving With Smart, Timely Payments

Getting your debt under control involves more than negotiating with your creditors. Another step you can take is managing how you make your monthly payments. First, payments should always be on time; this not only helps preserve your business credit rating, but it also helps you avoid costly late fees which merely add to your debt. Paying ahead when possible can also save you interest over the term of a loan, just be careful of prepayment clauses you have been unable to eliminate.

Boosting Business For Added Cash Flow

While it may seem counter-intuitive to work towards new business while attempting to get your debt load under control, the fact is more cash flow allows you to pay your debt in a more timely manner, and begin operating your business on a cash basis. This may require some creative financing solutions; for example, if you need immediate cash to invest in materials to deliver a large order, you may think you have no options but to borrow money again which seems counterintuitive to what you are trying to accomplish. There are some options however including:

  • Receivables financing — if you are like most small and medium-sized business owners, you are probably owed money from customers. Rather than wait the full 30 or 60 days until those invoices are due, consider selling some, or all those receivables for immediate cash. While you will get less than face value, this could provide an immediate influx of cash.
  • Purchase order financing — rather than use existing invoices, you may also opt to use purchase order refinancing. This method of financing allows you to get the much-needed cash to fulfill big orders by using the order to borrow money. This allows you to purchase the materials you need to fulfill the order without incurring additional debt.

Think About Your Business Model

If you are maintaining a large inventory for future orders, consider talking to your vendors about optional ways of doing business. Perhaps you can purchase materials as needed, or you can return excess product at the end of a job; remember, inventory on hand may be good, but if it is tying up your cash flow, it impedes your business growth.

Nearly all businesses have some debt, however, debt can cripple a business to the point of leaving you with no options. Capstone Capital Group offers a range of financing options for small and medium-size business owners. Contact us today, call us at (212) 755-3636 and speak with one of our highly skilled representatives and let us see how we can help your business get your debt under control.

Cash Against Documents - Capstone

Understanding Cash Against Documents (CAD)

10:30 03 August in Blog

Doing business internationally is risky. Suppliers and buyers alike face risks; for the buyer, it means putting up money without a guarantee of delivery and for sellers, shipping products without cash upfront could mean they lose product to non-payment. Cash against documents (CAD) is used to ensure an importer pays for goods before they are in receipt of those goods.

Minimizing Importing/Exporting Risks

The best explanation of how an import/export transaction works is to think about the process you go through when purchasing a home. There is an escrow agent that holds funds until the transaction is complete. Once the seller has signed the appropriate documents, and the buyer has signed the mortgage notes, then the escrow agent releases the funds for the transaction. This is similar to how an international transaction would work.

The seller of products maintains the ownership rights to the items they are selling until such time as the buyer makes payment. Prior to that, an intermediary, which is generally a bank, holds the documents that include import papers, invoices, and bills of lading. The intermediary also holds the funds for the transaction. Once the buyer has accepted delivery of the product, the funds are released to the seller.


Your  Partner for Import Financing

Capstone has extensive experience dealing with international transactions. We understand sometimes the best, cost-effective materials must be purchased overseas. We also understand, in many cases, you are buying large quantities of materials which can involve a significant investment. We can help you with a broad range of import financing solutions and assistance including:

  • Setting up the required import services
  • Assistance with air and sea shipping
  • Making inland freight arrangements,
  • preparation of shipping documents
  • Preparation of export licenses
  • Establishment of letters of credit

We provide these services to businesses in a range of fields. Small and medium-sized business owners often do not have the resources necessary to have an internal department to handle these challenging transactions; Capstone can help.

How Letters of Credit Work

A letter of credit has specific elements. The issuer of the letter of credit, acting for the buyer, agrees to pay the seller a specific amount of money under specific conditions. Before these funds are released, however, the seller must present the appropriate documents providing that the number of goods has shipped, the quality of the goods has been verified and the goods have shipped on time. There are time limits for meeting this obligation. Once the documents have been verified, assuming they conform to the terms and conditions set out in the letter of credit, and the buyer takes possession of the goods, the funds are released to the beneficiary, the seller.


How Does Capstone Help?

Capstone is committed to assisting clients with financing for their business. We understand how difficult international transactions can be and we are committed to ensuring your hard-earned money is protected. We can help provide you various services including helping you secure a letter of credit to ensure your international transactions go smoothly.

Our goal is to make sure you can get the presold goods you need without having to put up the full amount of the purchase up front.

Letters of credit can be used for a single transaction or may be used for ongoing transactions. We understand every business has different needs, and we also understand no two transactions are the same. We will customize a solution that works to meet your individual business needs.

Advantages of CAD Financing

Cash against documents provides a win/win for everyone involved. Most importantly, the buyer typically does not need a bank line of credit. The costs involved in these transactions are usually lower than with other international financing options. We also make sure the process is easy to implement and fast. We understand how important it is for you to have the materials you need for your business and the risks involved in international transactions. Let us help you take advantage of this important tool for your international business needs.

Capstone understands every business owner, business, and the transaction is unique. This is one of the reasons we work tirelessly to find a solution that works for your business. Whether you need a one-time customized solution for a big shipment, or your business will be accepting international deliveries on an ongoing basis, we can help. For more information on how Capstone Capital Group can help you with your international transactions, or to receive a quote, please email us at [email protected] or call us at (212) 755-3636 to speak with one of our skilled representatives today.

Accounts receivable financing

Help Your Business Thrive with Receivable Financing

15:29 01 August in Blog, Business Funding

Your vendors, employees, or landlord are unlikely to wait until your customers pay their invoices to get paid. Business owners who are just starting up, have just made an investment in new equipment, or are in the process of attracting new customers all have one thing in common: they need cash.

When Input and Output Collide

There is little doubt you need cash to keep your business operational. You must be able to hire additional staff members, invest in equipment, and make sure you deliver product to your customers on time. These matters require available cash; unfortunately, most business owners do not have a ready supply of cash when they need it most. This is why today, more business owners than ever before are turning to accounts receivable financing; better known as factoring.

Benefits of Accounts Receivable Financing

Cash — nearly immediate cash is the most significant benefit you will gain when you factor your receivables. Readily available cash can prepare you to land a new customer, pay your current debts, or help you expand your business. Receivables financing is a much different option than bank financing; specifically, it is faster, and depends on your client’s credit rating rather than yours.

Improved Options for Business Growth

Many business owners believe if they intend to use accounts receivable financing, they must do so with all invoices. This is inaccurate; there is a method called “spot factoring“, allowing businesses to get cash against specific invoices any time they need an influx of working capital. It is also important to note that while typical bank financing may have strings attached, telling you, a business owner, how you can spend the money they loan you. There is no such restriction with factoring; you can use the cash anyway you deem appropriate to ensure your business stays operational.

Avoiding Month to Month Money Crunches

Too much month left at the end of the money? Need to pay your business invoices, or employees? Chances are, you have customers who have not paid their invoices; many times, you have offered 30-day payment plans and they use every single day. This may work well for your customer, but it may not work as well for you. This is why spot factoring may be the answer to your problems. You can get nearly immediate cash when you spot factor; in most cases, you can get cash within 24 to 48 hours of submitting an approved invoice.

Time For Growth? Get Cash Fast

Expanding a business can be very exciting; the problem is it is often costly. Too many business owners must often decide between paying their regular bills, and growing their business. Our goal is to make sure you have the capital you need to expand your business. Whether it is time to hire new staff members, invest in new equipment, or you have a new client who has placed a large order, you may be suffering a cash crunch. We know you cannot wait until your customer invoices are paid, the opportunity could slip through your fingers. This is why spot factoring, or regular invoice factoring could be the answer for your business.

Invoice Factoring Versus Bank Financing

One of the biggest challenges business owners face is establishing a line of credit with a local bank. This is because banks often have lengthy applications, stringent credit requirements, and want businesses to have an established track record before making a loan. We often are told by small businesses that banks only want to help them when they least need the money.

Borrowing money from a bank often means onerous terms. You may face prepayment penalties if you are doing well and want to pay ahead, your bank may dictate how the proceeds from the loan will be spent, and you may have to provide a personal guarantee. Most of these issues can be avoided by factoring your invoices; whether you want to factor the invoices of one client, or every client, we can customize a solution to meet your specific business needs.

When there is forward momentum that means growth for your company, you need to maintain that momentum. This is why Capstone may be the answer to your financing needs. We work quickly, and we offer a range of business financing options, Contact Capstone Capital Group, LLC today and learn more about how we can help you grow your business.

Skills Shortage May Require More Training

10:14 11 July in Blog

Unemployment continues its downward trend and there are over 6 million job openings nationwide. While this might seem ideal, hiring has actually slowed. Only 5.05 million hires were reported in April by the JOLT survey. This means that will companies need workers, they aren’t finding the right matches.

 

While increased jobs are generally a good thing, what can companies looking to hire do when those looking for work don’t have the right skill set?

 

Skill shortages are nothing new, and if companies manage to bring more manufacturing jobs back to the U.S., there will be even more skill shortages. Thankfully, the picture isn’t completely bleak. By investing in one’s current workforce and training new hires, companies can ensure they will have a pool of skilled labor when needed.

Reassess Job Roles

There are still many Americans who are underemployed. Ensure your company is utilizing the individuals you already employ in the best manner. You may find that some of your employees have additional training that can help them transition into another role and fill a gap that you hadn’t been able to hire for.

Train Your Current Staff

Similarly, some employees may be willing to attain further training if it is subsidized or offered. Employees will feel like the company cares about their development and the company will effectively increase its employees’ skill sets.This may also assist with retaining employees as employees who feel they have growth opportunities and that their company cares about them are more likely to stay with the same company.

Train New Hires

If you can’t find individuals with all the skills you are looking for, determine which skills are the most essential and which you may be able to provide training for. As you hire, keep this baseline in mind and implement a program to get your new hires up to speed.

Connect with Schools

High schools, community colleges, universities, and vocational programs across the nation partner with employers to help ensure their graduates are able to find employment once they graduate. Connecting with local schools and discussing what your needs are may help increase your pool of applicants.

 

Training isn’t an inexpensive endeavor. It is, however, a worthwhile investment in the future of your company and industry. In addition, it can help promote retention with your employees and ensure that work is being completed to your specifications.

 

If you’re interested in training your employees, you may find that you need additional cash flow to cover payroll for the training hours or other operating expenses as some of your staff focus on learning new skills. If you’re in the manufacturing or construction sectors, consider purchase order financing or factoring to increase your cash flow. It can be difficult and frustrating to apply for a bank loan even when the benefits of increased capital are clear. Rather than relying on the traditional banking system, speak with a business funding group that offers PO financing and invoice factoring to see how you can increase your cash flow to grow your business.

 

Business funding groups like Capstone Capital Group, LLC work with companies in particular industries to provide needed cash flow in a timely manner. If you work on an invoicing system, you may be eligible for a factoring program. To find out more, visit the Capstone Capital Group, LLC website or contact us today.

Encouraging Diversity in Business through Small Business Funding

11:30 26 May in Blog

Capstone Capital Group, LLC aims to provide access to capital through factoring and purchase order invoicing. An alternative to traditional bank loans, these services function as a quicker, more reliable funding stream for businesses in the construction and service sectors. In addition, Capstone Capital Group, LLC is committed to helping business owners who have been historically marginalized or overlooked by traditional lenders.

While predatory lending is often thought of as a thing of the past, it continues to affect communities.

It’s clear that predatory lending is a pernicious practice that can have wide-ranging consequences. So too are the discriminatory practices that lead to these loans or to being rejected for a loan. With local economies still recovering from the 2008 financial crisis and the numerous foreclosures caused by predatory loans, we believe it is important to support all small business owners so they can once again help their communities thrive.

Small business owners are the largest employers in the United States. They offer invaluable services to their communities and help create healthy local economies that truly meet the needs of their residents. In order for all communities to thrive, however, it is important to ensure that all eligible companies receive the financing they need. One way we’ve found to support small business culture is to encourage diversity through funding.

Minority Small Business Funding

Because of historical factors, women and minorities often face a hostile lending market. While some organizations like the SBA encourage organizations to work with these underfunded business owners, traditional banks still lag behind in appropriate funding and may even exacerbate the problem by offering expensive, high-risk financing products. This can disenfranchise small business owners and put their businesses in jeopardy.

Capstone Capital Group is committed to supporting diversity through its small business funding. Our Diversity Outreach Program helps qualified small business owners attain the capital they need to support and grow their businesses. For the purposes of our program, at least 51% of the business must be owned by an individual who is one of the following:

  • Female
  • Black or African American
  • Hispanic
  • Native American/Pacific Islander
  • Veteran

Appropriately designated minority-owned business can apply for funding through factoring or purchase order financing. A skilled representative can help explain how these options may benefit your business and which may be the appropriate choice depending on your industry.

Working with Capstone Capital Group, LLC can help you access the capital you need to expand your business or take on new clients. With a relatively quick approval process, you’ll have your answer without the stress or paperwork of a traditional bank loan.

Capstone Capital Group, LLC is dedicated to encouraging diversity and helping communities flourish. We believe that by assisting small business owners, we can do just that. For more information about whether you qualify for Diversity Outreach Program, visit our website. If your business has already been designated “minority-owned” and you are in need of funding, call one of our skilled representatives at (212) 755-3636.

 

“Stimulative Monetary Policy” is Ending: What Does That Mean For Small Business?

11:00 12 May in Blog

Janet Yellen is the Chair of the Board of Governors of the Federal Reserve. You may have seen her in the financial news over the past few months as she introduced recent Fed rate hikes. She is expected to make an appearance again in June 2017 for another rate hike, the fourth since the Great Recession and the second this year. These hikes are a clear indicator that the “Era of Stimulative Monetary Policy” is ending and that the Fed believes the economy is in a good position.

What does this mean?

And, perhaps more importantly, what does it mean for small businesses in need of financing?

The stimulative monetary policy adopted by the Fed in mid-2006 was aimed at buttressing the economy. The goal was to create an environment that encouraged lending, though small businesses did not see much help by way of bank loans. Even SBA-supported loans dropped precipitously.

At a speech at the University of Michigan in April, Chairwoman Yellen remarked, “Where before we had our foot pressed down on the gas pedal trying to give the economy all the oomph we possibly could, now [we’re] allowing the economy to kind of coast and remain on an even keel. To give it some gas, but not so much that we’re pressing down hard on the accelerator.”

The previously mentioned fed rate hikes are those small bursts of gas Chairwoman Yellen refers to. The Fed is poised to tap the pedal two more times this year. While some think it will spur bank lending, others aren’t so sure.

While bank lending has remained low despite a change in economic climate, there’s no clear indication how banks will react to a higher fed rate—at least in regards to lending to small businesses. There is a chance that, because banks will be able to see a larger profit off their loans, they may increase their small business lending activities. However, the loosening of financial regulations may not make that the most attractive market for large banks who have plenty of other options.

Where does that leave small and medium business owners?

Business owners should be aware of all the financing options available to them. While bank loans may seem the traditional route, they aren’t the most effective way to quickly attain necessary capital. Rather than running through the obstacle course of the loan application process, business owners may be better served investigating private business funding companies like Capstone Capital Group, LLC.

Capstone Capital Group, LLC is a financing company that provides factoring and purchase order financing services to help small business. Often times, growing businesses that are trying to establish themselves find it difficult to wait for payment on large jobs as that payment is frequently required to pay employees or pay for goods. Factoring and PO financing can ease this burden by providing eligible businesses with quick capital. It’s faster than a bank loan and easier to attain.

The best way to determine whether factoring or purchase order financing are suitable for your business is to speak to a representative. If you’d like to learn more about these financial services, you can also visit our website.

Whichever path large banks choose—whether they start lending more, less, or remain in their slump—you have other financing options available to you. Take the time to learn about factoring and purchase order financing so you have these tools in your toolbox when necessary. Give us a call today for more information.

Small Businesses Feel Uncertain About the Future

11:00 08 May in Blog

The National Federation of Independent Business (NFIB) is an advocacy group for small businesses that consistently surveys its members to get a reading on the current business climate from small businesses. Currently, around 325,000 small business owners are members of the organization. While the group is clearly political in nature, its surveys can help provide some insight into the state of small businesses.

The Uncertainty Index

One of the surveys the group does is called the Uncertainty Index. The goal of the Uncertainty Index is to determine how business owners feel about the future. According to the group’s 2016 Small Business Problems and Priorities survey, two of the biggest concerns for small business owners are uncertainty about the economy and government actions.

NFIB defines uncertainty as “the inability to anticipate the outcomes of important future events which are critical to planning and forecasting for the firm.”

Shortly before the election, the uncertainty index rose to a 42 year high as business owners were clearly unsure of the path the nation was about to embark on and what it could mean for the economy. In March, the Uncertainty Index remained high at 93, its 2nd highest level since it was first measured.

To measure uncertainty, the NFIB calculates how many business owners answer “I don’t know” or that they are uncertain to six questions from the monthly Small Business Economic Trends Survey. These six questions focus on business expansion, thoughts about business conditions in the future, sales expectations, employment planning, the ability to procure financing in the future, and whether they may make capital expenditures in the following three months.

Beat Uncertaining with Planning

While some aspects of uncertainty cannot be tackled—business owners will always be faced with some form of ambiguity—planning can help small business owners better prepare for any issues that may arise.

One way to help business owners tackle uncertainty they have about the future is through investigating funding options. Question five specifically states, “Do you expect to find it easier or harder to obtain your required financing during the next three months?” Too many business owners may interpret this question as dealing with bank financing or credit cards. While it is clear that banks do not make many loans to small businesses and that small business lending has been down, there are other options available.

For companies that invoice for their services after a job is complete, factoring may be a useful financing method. Construction companies and contractors frequently use factoring to help ensure they have the capital to cover supplier costs and payroll. There are multiple different types of factoring. To learn more, visit our website or contact one of our skilled representatives.

Manufacturers and subcontractors may be eligible for purchase order financing, which is used to finance the purchase or manufacture of goods that have been presold. By focusing on the creditworthiness of the buyer, a financing company can help newer businesses establish themselves as they take on more clients and provide the necessary capital to ensure the product is delivered as specified.

The future of small businesses doesn’t need to rely on the banking climate. While there will always be a measure of uncertainty (it’s just a part of doing business, after all), being aware of one’s financing options can help alleviate the stress that comes with not being able to know the future.

If you’re interested in learning more about factoring or purchase order financing, reach out to one of our skilled representatives today.

manufacturing jobs

Bringing Manufacturing Jobs Back Requires Investment

11:00 05 May in Blog

Buying American made goods is becoming popular again across the country, however, finding them isn’t always easy. For manufacturers intent on capitalizing on the rising trend and filling the need, reshoring is often necessary. But reshoring isn’t easy—or cheap. Thankfully, private financing companies are helping fill the funding gaps.

The Hidden Costs of American Manufacturing

For companies interested in relocating more of their manufacturing activities to the U.S., whether to capitalize on the Made in the USA trend or to reduce production and shipping times, there are some issues that must be planned for adequately. In addition to the financial costs of moving or purchasing equipment, leasing new space, and hiring staff, it can also take a while to find adequately trained employees, increasing the length of time it will take to get a plant up and running.

To date, those companies that have been able to reshore more easily are those who have an established network of U.S. suppliers and have found that their production activities have been simplified thanks to the move. Companies that require skill sets that have experienced a talent shortage in the U.S. will either need to first locate schools that continue to train in those skill sets or a pool of individuals with interest in being trained in those skill sets. The textile industry and other industries that offshored their activities decades ago are hardest hit by this talent shortage.

With the added expense of either comprehensive talent searches or additional training, many companies are still looking at reshoring. Ensuring there is enough cash flow to find the right staff with the right skill set or to purchase the appropriate equipment can be difficult, however.

Smaller Firms Hardest Hit by Move

According to a 2016 survey by AlixPartners LLP, almost 70% of European and U.S. manufacturers and distributors are considering relocating their production operations closer to home. Even those companies that have limited funds for moving (primarily, smaller firms) are interested in reshoring. For these smaller firms, however, it is imperative that the move be successful and that all possibilities are planned for and properly executed upon. Their smaller budgets require strict budgeting and thorough researching of the talent pool. These firms can be helped by discussing their needs with a private business funding company.

Financing Manufacturing Activities

While bank lending activity remains low in spite of a healthy economy, other financing options prove promising for manufacturers in need of cash flow. Purchase order financing and factoring continue to provide manufacturers with the capital they need to sustain and grow their businesses. Partnering with a reputable private financing company such as Capstone Capital Group gives manufacturers the ability to actively craft their futures and plan for better, more efficient production methods.

If you’re thinking of reshoring and are interested in how PO financing or factoring work, consulting with a trained specialist at Capstone Capital Group should be your next step. Give us a call or visit or website to learn more.

Slow Business Lending Continues Despite Economic Growth

11:00 01 May in Blog

When you hear that the market is doing well or that unemployment is low, you might assume that it’s the perfect time expand your business and finally apply for that business loan. Unfortunately, you’d be wrong.

Now, that’s not to say you shouldn’t grow your business. However, a business loan from a bank may not be the best way to do it. Despite a healthy economy, business lending remains slow.

While lending grew about 6.4% in 2016, from March 2016 to March 2017, bank loans and leases only grew about 3.8%. The numbers for business lending are worse.

The Current Business Lending Environment

October 2016 provided a rare growth of 8.9% in commercial and industrial loans, however, the numbers from March 2016 to March 2017 barely reflect that increase with a growth of just 2.8%. That’s a slow growth and it isn’t just puzzling business owners who are being rejected—it’s confusing economists, too.

So why is economic growth and stability not being reflected in bank commercial lending? Some point the finger at oil and gas, claiming that those companies are paying back their loans at an increased rate, which may skew the numbers. Others say that lending has slowed across the board and that the oil and gas hypothesis doesn’t account for that. Add to that the fact that everyone is still getting accustomed to a new political administration that is implementing new policies, and the possible reasons increase but with no added clarity.

Small Business Should Look Elsewhere for Funding

With banks barely lending, small businesses are the ones most hurt. While they are a vital part of a healthy economy and create numerous jobs in their communities, small businesses are too often overlooked by large banks and left trying to find alternative sources of funding. While borrowing from friends and family may help in a pinch, it is not a long-term solution and can end up damaging those relationships. Exploring other business funding sources should be a priority for small business owners. Rather than expending time and energy applying for business loans that have little to no chance of being funding, small business owners should look towards business funding companies such as Capstone Capital Group, LLC. to ascertain whether they are eligible.

Capstone Capital Group, LLC is an invaluable resource for contractors, importers, and manufacturers. By providing factoring and purchase order financing, Capstone Capital Group, LLC helps small businesses in need of quick capital.

Capstone Capital Group, LLC Helps Where Banks Don’t

Rather than expending time to create or gather the various documents needed to apply for a traditional bank loan, if your business invoices for work completed (for example, if you’re a construction company or a government contractor), you may be eligible for invoice factoring through Capstone. With various options available, Capstone can provide funding in a manner that helps companies quickly. Businesses that produce pre-sold products may be eligible for purchase order financing.

Both of these options are quicker—and easier—to apply for than a traditional bank loan. If your company has good credit and your clients have good credit, you have a much higher chance of receiving financing than you would from a bank.

Factoring and PO financing aren’t for everyone. By speaking with one of our trained specialists, you can learn more about what funding solutions may work best for your company. In business, time is money, so don’t hesitate. Give us a call today or stop by our website to request more information.

Download our Two Guides - Restarting your Business Post Covid & Turning your PPP Loan into a Grant

Capstone Capital Group, LLC wants to help you make sure your planning is flawless, which is why we are offering these free guides to help you get back to business on a sound financial footing.

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