CFPB be Reformed by Neugebauer's Bill

Could the CFPB be Reformed by Neugebauer’s Bill?

14:50 25 March in Blog

CFPB be Reformed by Neugebauer's BillOver the past few years, there have been attempts to change the composition of the Consumer Financial Protection Bureau (CFPB), even its name. Now, a new bill might truly pass Congress.

Introduced by Republican Representative Randy Neugebauer for the state of Texas, H.R. 1266 would create a five-member commission structure to lead the CFPB, which is currently headed by Director Richard Cordray.

Neugebauer’s proposed bill lays out the framework for creating a bipartisan commission leadership structure. Included in the bill is a provision that no more than three commissioners can be members of one political party. This is so that there are not coinciding vacancies when terms end.

Additionally, Neugebauer’s bill readjusts CFPB executives’ pay to the federal scale as well as creates an official seal for the agency. There is also a proposal to change the name of the CFPB to the Financial Products Safety Commission.

Much support has already been garnered for Neugebauer’s bill. The legislation was introduced with 20 initial co-sponsors, all Republicans and all members of the House Financial Services Committee, on which Neugebauer serves.

A coalition of banking and business groups including the American Bankers Association and the U.S. Chamber of Commerce expressed their support in a letter that read, “We believe that a five-member commission, as Congress originally intended, will better balance consumer access to financial products with the need to ensure a fair marketplace.”

Because Republicans control the Senate, a bill passed by the House is expected to pass even without Democratic backing. However, a coalition of more than 300 interest groups is in strong opposition to the bill, defending the CFPB.

Capstone Capital Group, LLC has eliminated the bank red tape by offering small to mid-sized businesses Single Invoice Factoring (“Spot Factoring”). Businesses can now get the immediate cash they need in exchange for working capital from Capstone Capital Group. For more information on Capstone’s Single Invoice Factoring call us today at (347) 821-3400.

Will Repealing Dodd-Frank Make Borrowing Easier - explained by Capstone

How the Dodd-Frank “Too Big to Fail” Legislation Hurts Small Banks

21:28 16 March in Blog

We have written numerous times about how the Dodd-Frank “Too Big to Fail” legislation is hurting smaller banks and interfering with loan approval for your small and medium-sized businesses.

Much of the regulation was designed to stop large money-center banks from taking depositor’s money and executing risky investments or engaging in risky transactions, which would thereby place the public at risk as well as the US financial system.

However, the unintended consequence of the law has created significant regulatory pressure on small and medium-sized banks, which has caused the regulators to take a one-size-fits-all approach to bank regulating. We can all agree the risks facing small and medium-sized banks are different than those facing the large money-center banks.

Compliance costs alone eat into the profits of the smaller banks, whose scale is smaller and has less profit than more major banks. The portfolios of the smaller banks are vastly different than those of larger banks as well. Most small banks lend into their communities and can assess the economy and risk related to their portfolio first-hand. This is not possible for the larger banks, as their footprint spans either a region of the US or the entire US. This leads to centralized decision- making with computer aided modeling to ensure that the loans are underwritten as conservatively as possible. Though not a negative thing, it’s different from how smaller banks are chartered to operate.

In most cases, the three “C’s” are used in small bank lending because the small town banker knows his customer. Credit, Character, and Collateral are what the small town banker relies on. Federal regulations do not see it the same way, causing conflicts between operation and management. The best way to manage it is to reduce the amount of loans and use the most rigid standards, which do not help the community that these smaller banks are chartered to help.

Congress has been listing to these smaller banks and indicated they would enact legislation to reduce the regulatory burden so they could operate like they should. It is important to note that very few smaller banks were affected by the financial crisis. The Republicans are attempting to provide relief for smaller banks while Democrats require that all of the Dodd-Frank provisions be in place for every bank regardless of size.

The Fed supports the changes for small and regional banks. However, it does not seem that these smaller institutions will be released from the “Too Big to Fail” category any time soon. As the economy continues to grow, and your need for working capital increases, please remember to call or email Capstone Capital Group, LLC at (347) 821-3400 or [email protected]

Job Growth Accelerates in the US

Job Growth Accelerates in the US

15:47 09 March in Blog

For the first time since 1997, the job market has seen more than one million new jobs created over the last three months. This is the most significant indicator of economic growth to come. The last five years have been volatile, with many finding it difficult to find appropriate work at livable wages. The accelerated job growth rate is the most promising indicator that our economy is finally emerging from the doldrums of lackluster growth.

Job Growth Accelerates in the USAlthough the indicators of economic growth are not spread worldwide, the trend in the United States is flourishing. This trend is positive for workers who are currently employed but have not had the benefit of any significant wage growth.  Leverage on salary and hourly rate negotiations are moving in the direction of workers.  As the unemployment rate continues to decrease, the pool of qualified workers is being reduced. This will encourage employers to give existing workers raises either for retention purposes or to reduce the cost of training new workers whose performance may not be known until a significant investment of time and money occurs.

Typically, US consumers fuel the world’s economies through consumption and consumer spending. And because of the strength of the domestic job market is so strong, the Federal Government feels more comfortable raising rates. The criterion they are monitoring is wage growth, which climbed 0.5% in January (up 12 cents to $24.75 per hour and 2.2% over the past 12 month).  Combined with hiring momentum, the indicators of growth the Fed has been monitoring make a case to raise interest rates.

Prior to the great recession caused by the financial crisis, and ensuing federal regulation, growth rates in the US were approximately 3% per annum.  At 3% per year, the growth rate was deemed positive and indicated a stable and growing economy.  Currently, growth is approaching 2.5% and is encouraging economists that this will not be a cycle where there a growth spurt is followed by a decline.  One of the indicators economists are hanging their hats on is that workers have started to leave jobs in search of higher pay. This indicates that employees have confidence in the economy, and that moving to a new employer does not bring the risk of layoff should growth rates drop. Employees believe that the economy will continue to grow and their job stability is not at risk.

Of course, there are still headwinds that face the US economy, but it is more sector-related. Construction, manufacturing and healthcare are all major sectors of our economy that are hiring new workers. It is time to harness this growth and bid on new contracts, create product line extensions to sell more goods or services to your existing customers, and find new companies that will benefit from working with you.

Capstone Capital Group, LLC has eliminated the bank red tape by offering small to mid-sized business Single Invoice Factoring (“Spot Factoring”). Businesses can now get the immediate cash they need in exchange for working capital from Capstone Capital Group. For more information on Capstone’s Single Invoice Factoring, commercial financing call us today at (347) 821-3400.

Position Your Company for Growth

Position Your Company for Growth

18:12 03 March in Blog

Position Your Company for GrowthSince June of 2014, oil prices have declined by over 40% causing the US dollar to surge in value against most other currencies throughout the world. This may have had a negative impact on the oil patch and US exporters, but it is creating greater disposable income for the middle class. According to the New York Times, “Lower energy prices especially with the cold winter we have all been experiencing have been a benefit to all.” The increased value of the US Dollar also increased consumer purchasing power. If the Fed follows through on increasing interest rates mid-year as is anticipated, we will see oil prices drop and watch the dollar strengthen. Initially, there was a concern over deflation, but growth is mitigating that potential problem.

“The forces that were fueling the creation of wealth and leaving the middle class behind were high oil prices, easy money and a weak dollar. Two of the three forces have been quelled that being, high oil process and the weak dollar,” according to the New York Times.

As a result, capital inflows into the U.S. will occur. The economies of the G-20 are all in negative growth or slow growth phases due to high social welfare policies and high taxes. The capital inflows will help create demand in our economy and cause growth as businesses take this capital in and use it to expand.

These trends work in favor of job creation, higher wages and business growth. As was mentioned in our last blog, the low business formation rate over the last six years has reduced competition and given many small businesses the ability to move from start-up to entrenched businesses. These businesses are poised for economic growth and wealth creation. Add to this the upcoming presidential election that will be in full swing by the middle of this year and optimism should prevail through most of the economy.

If it looks like the next president will be friendlier towards business, you will be in for a great period of growth even if policies do not change. The fact that we will have a new leader who at least supports business growth will have a tremendous impact on growth and overall sentiment regardless of which party controls the White House or Congress.

It is imperative that you continue to invest in your business and increase your infrastructure to handle increased demand for your goods and services. Position your company to ride the growth wave as other have in the mid-1980s, late 1990s and early 2000. 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 Commercial financing, Single Invoice Factoring, give us a call today at (347) 821-3400 and speak to a representative.

A Case Study From Capstone

A Case Study From Capstone

22:07 18 February in Blog

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.

See Our Current Case Studies Here

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

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

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.

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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