A Case Study From Capstone

A Case Study From Capstone

22:07 18 February in Blog
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A Case Study From Capstone

Through the use of Capstone’s unique funding programs, our clients take advantage of opportunities that would otherwise be lost as a result of being undercapitalized. One of our most recent success stories is an interior design firm that was the successful bidder for a Fortune 100 pharmaceutical firm. They required a renovation of the electronic skylight shades for the employee cafeteria.

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The challenge our client faced was a lack of credit, which made the matter a COD transaction. Because the transaction size was in the six-figure range, the client would have had to forgo the opportunity entirely, were it not for access to capital.  Prior to receiving the order, the client applied for a funding facility with Capstone Capital Group, LLC.  When the order was received, the client was entered in our system and we began assisting them immediately.

Long lead-time was another client concern. The order was placed in early November with a late January installation date.  The COD terms required a significant sum of money to be tied up for about 90 days if the terms were kept at COD.  Capstone entered negotiations with the custom shade manufacturer with the client’s participation and arranged for credit and payment terms that were acceptable to all parties. In the middle of January, the shades shipped to an authorized installer’s warehouse as part of the transaction negotiated by Capstone.  Following a few pre-installation meeting with managers of the physical plant, the shades were delivered to the site. The old shades were demolished and remove and the new shades were installed.

As a result, the work was completed and accepted by the Fortune 100 Company, fulfilling the contract between our client and their customer. The client billed the account, Capstone factored the invoice and in March, Capstone will make final settlement with the interior design firm.

The key points to take away from this case study are as follows:
-Capstone client receives six-figure interior design contract and needs capital.
-Capstone client on COD terms for entirety of project with vendors.
-Capstone works with client to create liquidity and structure a PO Finance transaction to create credit with all vendors.
-Custom goods are ordered.
-Custom goods are received, demo is completed, and new shades are installed.
-Work is accepted and completed by Fortune 100 customer.
-Customer is billed.
-Invoice is factored, retiring the PO advances.
-Client receives working capital.
-Accounts receivable is collected.
-Client receives profit.
-100% leverage, 100% of the time.

Capstone Capital Group, LLC provides clients with the capital they need to fund projects. For years, we have helped organizations get the immediate cash they needed without the typical red tape that most banks require. For more information about Capstone and our Single Invoice Factoring, give us a call today at (347) 821-3400 and speak to a representative.

Why Policy Dictates the Economic Outlook

Why Policy Dictates the Economic Outlook

17:52 12 February in Blog
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Why Policy Dictates the Economic OutlookLast year, small businesses made capital investment decisions over “whether an expiring tax provision, Sec. 179—which allowed for $500,000 of accelerated depreciation for equipment purchases—would be continued, or whether a scaled-down version with a much lower threshold of $25,000 would take its place,” according to The Wall Street Journal.

In December, Congress reinstated the larger Sec. 179 deduction for 2014, meaning that small businesses were pushed to make decisions surrounding equipment purchases before knowing what the tax provision stated. On the first of January, the deduction dropped back to $25,000.

Such temporary tax and budgetary policy making creates roadblocks for consumers and business to plan and invest in the future.   Comprehensive tax reform and annual federal budgets are a necessity for businesses to plan their capital investment and capital expenditures budgets.  Inevitably, legislation creates economic ambiguity. In order to improve the economic outlook, more stable laws are vital.

Capstone Capital Group, LLC helps clients build sturdy outlooks for their economic future by providing robust services. For years, we have helped organizations get the immediate cash they needed without the typical red tape that most banks require. For more information about our business funding solutions, Single Invoice Factoring, give us a call today at (347) 821-3400 and speak to a representative.

Spring Brings ‘Spec’ Homes

Spring Brings ‘Spec’ Homes

21:54 03 February in Blog
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Though winter is still upon us, builders are betting on a strong spring with speculative, or ‘spec’ homes. The construction of such homes is already underway with home builders getting a head start. Speculative homes are homes built without a buyer in place. The advantage of ‘spec’ homes to home builders is the assumption that the wind carrying recent sales will blow into the home purchasing season of spring.

Spring Brings ‘Spec’ Homes

Going into 2015, over 200,000 homes under construction or recently completed were listed for sale by home builders, according to the data released by the Commerce Department. This number is a 17.2% increase from 2014, signifying optimism amongst builders for spring home sales. Since June 2008, the sales of new homes this past December were the highest they’ve been.

With the Super Bowl marking an end to football season and a start to the spring home selling season, builders are prepping ‘spec’ homes for sale. As traction around selling speculation homes grows around March and April, more communities will be opened by builders for a promising spring home selling seasons.

Capstone Capital Group, LLC. Understands the importance of the spring home selling season and the growth it means for the home building industry. For years, we have helped organizations get the immediate cash they needed without the typical red tape that most banks require. For more information about Capstone and our Single Invoice Factoring, purchase order factoring give us a call today at (347) 821-3400 and speak to a representative.

Capstone Launches New Forum on LinkedIn

17:12 28 January in Blog
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New York City based Capstone Capital Group, a leading private finance company serving clients in the construction trades, service companies, wholesale, and other arenas, has launched a Capstone Diversity Business Funding Forum on LinkedIn.

With this group, Capstone aims to push new business insights to our clients wanting to grow their companies and connect with other industry professionals. Our dedicated team of experts wants to provide powerful and robust client-specific solutions through Recourse and Non-Recourse Factoring Services, Purchase Order (PO) Financing and International Trade Financing. In connecting with Capstone, you’ll find that we have the capability to provide you with the two crucial aspects to your business’s success—advice and capital.

If you’re a CEO, business owner, manager or investor, our new Capstone Diversity Business Funding Forum on LinkedIn is designed to help you reach your business goals and ultimately enable you to achieve your dreams. This forum allows members to engage with industry thoucapstoneght leaders, cultivate strategic planning ideas and share success stories, common challenges and experiences. Members will learn Capstone’s tips on funding and financing to grow their businesses and experience growth in profits.

“The Capstone Diversity Business Funding Forum is a game-changer because it puts small business owners in the game. Being a minority business owner my entire life, I know the challenges and obstacles that need to be overcome. I am proud to present this group, which will empower minority business owners with the resources and funding insights that are essential in helping their revenues skyrocket,” said Alvin Hartley, Director of Diversity for Capstone Capital Group, LLC.

The Capstone Diversity Business Funding Forum will offer members a full range of insights, discussions and ideas for diverse business needs. Join our LinkedIn forum to connect with other industry leaders and learn the innovative financial solutions that will help your business diversify and prosper. From factoring techniques to funding solutions, our group focuses on topics related to your needs so your business can thrive. We can’t wait to connect! Click here to Join Now!

Alvin Hartley, Director of Diversity, will be the driving force behind the LinkedIn initiative as a diverse director of Capstone Capital Group, LLC. Capstone is a private finance company in New York City that provides single invoice factoring, purchase order, and trade financing that is vertically integrated into its factoring platform. For more information about Capstone and its services, visit www.capstonetrade.com/solutions/diverse-lending/ .

Happy Holidays from Capstone!

21:29 22 December in Blog
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Untitled2At Capstone, the holidays are a time for us to reflect on the past year and look to the future. 2014 has been a milestone year for us for all that has been strived for and attained. We achieve what we seek and couldn’t be happier about the growth and success we have seen. We hope you all had a prosperous 2014 as well and cheers to the New Year!

Capstone wouldn’t be a leader in innovative financial solutions if it weren’t for your continued loyalty. And it is in this spirit that we want to thank you, sincerely and truly for your support.

Capstone will be closed on December 24th, 25th, 26th and 31st as well as January 1st in order to ring in the holiday and the New Year with our beloved family and friends.

We wish you a happy holiday and look forward to the start of a healthy New Year!

Interest Rates on the Rise

16:52 15 December in Blog
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UntitledThis week, the Federal Reserve indicated that interest rates will be raised next year. In a statement issued from the policy meeting, the Federal Reserve said monetary policy will be “normalized.”

Since 2008, rates have hovered near zero, with the Federal Reserve offering consistent assurances that rates would remain near zero to contend the economy’s low inflation and high unemployment rate. The proposed normalization won’t happen overnight. Even with increased rates, the flow of the economy will still be considered, with rates beginning to rise mid-2015.

But, not everyone is in agreement. According to The Wall Street Journal, “Dallas Fed President Richard Fisher said rate increases might need to come sooner than the Fed plans. Minneapolis Fed President Narayana Kocherlakota said the Fed isn’t putting enough weight on the risks of low inflation. And Philadelphia Fed President Charles Plosser wants the Fed to stop giving time-linked guidance about its rate plans.”

Rates are predicted at anywhere from 0.375% to 4% by the end of 2016, with no solid figure agreed upon. All except two policy makers noted that they predicted an increase of short-term interest rates in 2015. Their median estimate put short-term borrowing rates at 1.125% in the next year. For 2016, the median rate estimate was 2.5% and for 3.625% for 2017. Of course, this is all gradual and dependent on the growth of the economy.

While the labor market has improved, with a lower unemployment rate, inflation could alter plans. The Labor Department reported recently that consumer prices dropped 0.3% in November. This is marked as the largest one-month drop since the massive financial crisis in 2008. Federal officials have confidence that this drop, as well as the recent oil declines, won’t completely hinder their efforts. Inflation developments will be watched carefully, and we’ll monitor developments from the next policy meeting to take place January 27-28.

Capstone Capital Group, LLC. understands the importance of these policy meetings and what higher interest rates mean for you. Capstone offers Single Invoice Factoring (“Spot Factoring”) as a solution.   For years, we have helped organizations get the immediate cash they needed without the typical red tape that most banks require. For more information about Capstone and our Single Invoice Factoring and purchase order factoring give us a call today at (347) 821-3400 and speak to a representative.

Sustaining Homeownership in an Unsustainable Economy

22:05 12 December in Blog
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Recent data suggests that significant roadblocks could arise in the near future that would challenge those wishing to become homeowners.  The data collected was made public under the Home Mortgage Disclosure Act (HMDA). From this information, we can gather that African American homebuyers represent 4.8% of the total home purchase loans from 2013.
 
For conventional loans, African Americans were denied at levels that ranged from 25.5% to 56%, according to the HMDA data from 2013. Projections assume there could be as many as 17 million new U.S. households leading up to the year 2025. Potentially, 13 million of the 17 million new households could be owned by minority families. So, what does this mean for the future of our economy?
 
During the foreclosure crisis, African American home-purchase loan trends have seen a significant decrease, falling from 8.7% in 2006 to 4.8% in 2013. In contrast to the increase there has been with Caucasian home-purchase loan activity (rising from 61.2% in 2006 to 70.2% in 2013); these figures are staggering.
 
More than 70% of mortgage loans were made to African American homeowners last year, and 63% were made to Hispanic homeowners. We want to tell you what can be done. There are a variety of tools and policies at your disposal that are proven to extend sustainable homeownership to racial minority homeowners. The 97% loan-to-value (LTV) mortgage is one tool that you might have seen featured on Freddie Mac. The rate for this type of loan is extremely similar to that of loans with down payments as high as 10%. Federal Housing Finance Agency Director Mel Watt declared that the government conservator of Fannie Mae and Freddie will consider reinstating the purchase of LTV loans by the two government-sponsored enterprises. Alternative credit scoring models are also under consideration.
 
Accessible home-purchase loan options should be just that, accessible. Minority families need accommodation at the national level so they can maintain job growth and sustain their homes. Capstone Capital Group, LLC understands the difficulty facing homeowners of color and we stand with you in fighting for the tools and policies that are necessary for sustainable home ownership. For more information about Capstone invoice factoring, commercial and business funding solutions, give us a call today at (347) 821-3400 and speak to a representative.

Wrist Watch Company Case Study

19:57 08 December in Case Studies
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Case Study Wrist Watch Company: Trade Financing & Factoring

COMPANY CHALLENGES

In addition to struggling with collections, bad debt and a lack of working capital, this company also operated below breakeven. Their debt exceeded the value of A/R and they were placed on cash-in-advance terms with vendors. The company was in work out with their primary bank on a $6 million credit facility.

BACKGROUND

Local family owned and operated wristwatch company headquartered in Upstate New York with its roots dating back over 100 years

• Majority of accounts receivable were long-standing relationships going back 40 years

• Provided Trade Financing and a Factoring Facility

• Conducted a credit review of all customers

• Reestablished credit terms with the company’s vendors

• Had company sell off old unusable inventory & non-sales generating assets and release excess employees to reduce monthly operating overhead

PROGRESS & FUTURE OUTLOOK

Sales doubled first 12 months – expected to increase by another 30% for 2014 • Customer base shifted from small boutique retail stores to major big box retailers and home shopping shows • Bank line significantly reduced

CAPSTONE’S SOLUTION LEARN MORE TODAY

Call: 212-755-3636

 

wrist-watch-company-case-study

 

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