Organize Finances Before the Holidays

It happens every year. The holiday season is suddenly upon you, and yet your business is not in optimal condition to take full advantage of this very special time of the year – shopping season!

Getting an Early Jump

The best way to extract maximum profits from holiday shopping is to have a large inventory of items that will be hot sellers in the last two months of the year. To some extent, this can be a test of your predictive powers, because normally you will have to decide what to order, and then order it, about six months in advance if you want to be sure of receiving what promises to be the season’s blockbusters.

Therefore, you must combine budgetary and marketing data to make reasonable forecasts of:

  1. How much sales volume I want to achieve during the holidays?
  2. What merchandize do I want to stock this holiday season?
  3. How aggressively can I set prices to fight for holiday sales?
  4. How should I spruce up the shop to get customers into the holiday buying mood?
  5. Will I need temporary workers, and if so, how many and what types?
  6. How will I store the early shipments of holiday merchandise I receive prior to Halloween? Will I need to rent temporary warehouse space?

There are many other questions you can ask, but this is a good start.

The outcome of this brainstorming should be any changes to your 12-month budget, laid out month by month.

Strengthen Your Working Capital

Next, examine your current debt situation. Do you owe money from last year? What interest rate are you paying on existing debt? What’s happened to interest rates in the last 12 months? Check your working capital situation – you’ll need plenty of cash and credit to finance holiday inventory, but you don’t want to spend a lot of time managing accounts payable for a lot of different vendor accounts. With sufficient cash on hand, you can pay vendors right away and benefit from purchase discounts. The answer is to consolidate your debt through a low-cost commercial small business loan. It’s much easier to manage a single creditor rather than contend with demands from a gaggle of vendors and creditors. When you consolidate your debt with IOU Financial, you don’t have to spend much time figuring payments, because we will debit small amounts every day from your bank account. This removes the pain and worry you might feel if you had to face a large monthly payment.

To order sufficient inventory in, say, June, when sales may be weaker due to the summer doldrums, may put quite a strain on your working capital at precisely the wrong time. The easiest solution is a small business loan form a commercial lender such as IOU Financial. By consolidating your old small business loans and adding fresh borrowings to the mix, you have the opportunity to optimize your debt and your working capital for the upcoming holiday season.

Get Your Technology Up to Speed

If you are not happy with your current accounting and point-of-sale software, well before holiday season is the time to either fix it or replace it. If you find any part of your current system holding you back from tracking real-time sales, shipping and restocking activity, it might be time for new solutions. You will also want to ensure you have installed the new chip-card readers throughout your store, so that you bypass any liability for fraud caused by lost, stolen or counterfeit credit/debit cards. Estimates are of about $450 to install each new card-reading terminal, so make sure you figure this expenditure into your budget.

The bottom line – you want to have sufficient working capital ahead of the holiday season in order to optimize your revenues once the end-of-year frenzy gets under way. Contact IOU Financial and learn how quick and easy it is to whip your finances and small business loans in shape for the lucrative holiday season.

IOU Financial Grants Stock Options

Montreal, Quebec, November 26, 2015 — IOU Financial Inc. (TSX Venture Exchange: IOU) (“IOU Financial” or the “Company”) today announced the grant of options pursuant to its Stock Option Plan.

The Company granted options entitling directors, officers, employees and consultants to acquire up to an aggregate of 1,563,500 Common Shares of the Corporation; these options have an exercise price of $0.55 and a term of five years from the date of grant with one-third (1/3) vesting immediately and one-third (1/3) vesting on each of the first and second anniversaries of the date of grant.

The Company also granted options to Paradox Public Relations Inc. (“Paradox”), its strategic investor relations consultants, entitling Paradox to acquire 150,000 Common Shares of the Corporation at an exercise price of $0.55; these options have a term of two years and shall vest over a period of 12 months, at a rate of 25% at the end of each three-month period.

IOU Financial Inc.’s Results for the Three and Nine Month Period Ended September 30, 2015

Montreal, November 23, 2015 – IOU FINANCIAL INC. (“IOU” or “the Company”; ticker symbol IOU/TSX-V), a leading online lender to small businesses, announced today its results for the three and nine month period ended September 30, 2015.

Loan originations for the third quarter ended September 30, 2015 were US$45 million, representing an increase of 108% over loan originations of US$21.6 million for the same period last year. For the nine month period ended September 30, 2015, IOU Financial originated US$110 million in loans, representing an increase of 66.2% over loan originations of US$66.2 million for the same period last year.

On September 30, 2015, IOU Financial’s total loans under management amounted to approximately $89.6 million as compared to $44.5 million for the same period last year, representing an increase of 101% over the same period in 2014. On September 30, 2015, the principal balance of the loan portfolio amounted to $21.1 million compared to $12.3 million for the same period last year, while the principal balance of IOU Financial’s servicing portfolio (loans being serviced on behalf of other parties) amounted to approximately $68.5 million compared to $32.2 million for the same period last year. IOU Financial recorded revenues for the quarter ended September 30, 2015 of $3.8 million versus $1.5 million for the quarter ended September 30, 2014, representing a 159% increase. For the nine month period ended September 30, 2015 IOU Financial recorded revenues of $9.3 million versus $4.3 million for the same period in 2014, representing an increase of 116%.

IOU Financial recorded net financial income before operating expenses for the quarter ended September 30, 2015 of $2.7 million versus $1.3 million for the quarter ended September 30, 2014, representing a 111% increase. For the nine month period ended September 30, 2015 IOU Financial recorded net financial income before operating expenses of $6.5 million versus $3.5 million for the same period in 2014, representing an increase of 87.4%. The Company closed its third quarter of 2015 with a net loss attributable to common shareholders of $929,100, or $0.02 per share, compared to a net loss of $170,825 or $0.01 per share during the same period of 2014. For the nine month period ended September 30, 2015, IOU Financial had a net loss attributable to common shareholders of $1.84 million or $0.05 per share (2014: $1.0 million or $0.02 per share).

For the quarter ended September 30, 2015, excluding non-recurring expenses that relate to the unsolicited takeover bid for the company, IOU Financial had net income attributable to common shareholders of $151,887. For the nine month period ended September 30, 2015, excluding non-recurring expenses that relate to the unsolicited takeover bid for the company, IOU Financial had a net loss attributable to common shareholders of $671,798.

IOU FINANCIAL ANNOUNCES SECOND TRANCHE CLOSING OF ITS PRIVATE PLACEMENT OF CONVERTIBLE DEBENTURES FOR GROSS PROCEEDS OF $1,292,000

MONTRÉAL, Québec, November 20, 2015 – IOU Financial Inc. (TSX Venture Exchange: IOU) (“IOU Financial” or the “Company”), a leading online lender to small businesses, is pleased to announce that it has closed a second tranche of its previously announced private placement of 10% convertible unsecured subordinated debentures (the “Debentures”) for gross proceeds of $1,292,000 (the “Second Offering”). The Second Offering, when combined with the previously announced first tranche of the private placement of Debentures, raised total gross proceeds of $10,500,000.

The Second Offering consisted of a brokered private placement on a “best efforts” agency basis for an aggregate of $1,292,000 in principal amount of Debentures, at a price of $1,000 per Debenture, through Palos Management Inc. (the “Agent”).

The Debentures will mature on December 31, 2020, bear interest at a rate of 10% per annum, payable monthly and commencing on November 30, 2015, and are convertible at their holders’ option into common shares of IOU Financial (“Common Shares”) at a price of $0.75 per Common Share (the “Conversion Price”), representing a conversion rate of 1,333.33 Common Shares for each $1,000 principal amount of Debentures. The Company will have the right to force the conversion of the Debentures into Common Shares at any time on or after December 31, 2018 should the 20-day volume weighted average price of the Common Shares on the TSX Venture Exchange (the “TSX-V”) exceed 125% of the Conversion Price.

The net proceeds of the Second Offering will be used primarily by IOU Financial to finance small business loans in the Company’s target markets and for general corporate purposes. The Second Offering is subject to final approval of the TSX-V. The Company anticipates that a third tranche closing for up to $1,000,000 in principal amount of Debentures will occur before December 31, 2015.

In connection with the Second Offering, the Company paid the Agent a cash commission of $32,300 representing 2.5% of the total gross proceeds of the Second Offering, and paid a sub-agent an additional cash commission of an aggregate of $500 representing 2.5% of the gross proceeds raised by such sub-agent.

Pursuant to applicable securities laws, all securities issued pursuant to the Second Offering are subject to a hold period of four months plus one day following the closing of the Second Offering. The Debentures will not be listed or posted for trading on the TSX-V.

This news release does not constitute an offer of securities for sale in the United States. The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and such securities may not be offered or sold within the United States absent U.S. registration or an applicable exemption from U.S. registration requirements.

Small Business Growth: Event Staffing Expansion

Justin brought 20 years of industry experience to the table when he created Texas-based Trinity Event Staffing. Beginning in the Dallas/Fort Worth area about six years ago, Trinity has now expanded to all the primary markets in Texas including Austin, College Station, San Antonio, and Houston.

Like many small business owners, Justin needed a little extra working capital in order to grow his business, and received a loan from IOU Financial. “At the time we sought out capital from IOU, we were expanding from Dallas/Fort-Worth to Austin and College Station. We wanted to cap off all the major places in Texas we should be doing business, and with this loan we have been able to do that,” Justin said. With the additional funds, Trinity Event Staffing was not only able to expand to new cities, it was able to hire a salesperson to focus on client relations in its existing markets, enabling business to flourish further.

“Traditional banking is not usually going to lend capital unless you have some piece of collateral that you’re going to give up. That wasn’t working for us. IOU was a wonderful alternative to the banks,” Justin explained of his experience with IOU Financial. “The process was extremely easy, and I was very impressed with the online portal. My closing specialist was sincere on the phone, he answered my questions, and he never [me] made feel pressured. I appreciated that he left everything in my court.”

Justin advises other small business owners to consider IOU Financial when seeking working capital. “I think the repayment structure of the daily payments is a clever way for IOU to collect, but also for me to pay a manageable amount over a manageable amount of time. We will definitely be keeping IOU in our wheelhouse of resources!”

 

IOU Financial working capital testimony

 

Justin was able to expand his business with an IOU Financial loan.  Why not you?  Learn more about business lending and have a Small Business Loan Consultant call you today!

IOU FINANCIAL ANNOUNCES THE CLOSING OF ITS PRIVATE PLACEMENT OF CONVERTIBLE DEBENTURES FOR GROSS PROCEEDS OF $9,208,000

MONTRÉAL, Québec, November 2, 2015 – IOU Financial Inc. (TSX Venture Exchange: IOU) (“IOU Financial” or the “Company”), a leading online lender to small businesses, is pleased to announce that it has closed its previously announced private placement of 10% convertible unsecured subordinated debentures (the “Debentures”) for gross proceeds of $9,208,000 (the “Offering”).

The Offering consisted of a brokered private placement on a “best efforts” agency basis for an aggregate of $9,208,000 in principal amount of Debentures, at a price of $1,000 per Debenture, through Palos Management Inc. (the “Agent”).

The Debentures will mature on December 31, 2020, will bear interest at a rate of 10% per annum, payable monthly and commencing on November 30, 2015, and will be convertible at their holders’ option into common shares of IOU Financial (“Common Shares”) at a price of $0.75 per Common Share (the “Conversion Price”), representing a conversion rate of 1,333.33 Common Shares for each $1,000 principal amount of Debentures. The Company will have the right to force the conversion of the Debentures into Common Shares at any time on or after December 31, 2018 should the 20-day volume weighted average price of the Common Shares on the TSX Venture Exchange (the “TSX-V”) exceed 125% of the Conversion Price.

The net proceeds of the Offering will be used primarily by IOU Financial to finance small business loans in the Company’s target markets and for general corporate purposes. The Offering is subject to final approval of the TSX-V. The Agent has the option, exercisable in whole or in part until November 24, 2015 (subject to any extension that may be granted by the TSX-V), to sell up to an additional $1,500,000 in principal amount of Debentures. The Company anticipates that a subsequent closing will occur on or about November 20, 2015.

In connection with the Offering, the Company paid the Agent a cash commission of $230,200 representing 2.5% of the total gross proceeds of the Offering, and paid sub-agents an additional cash commission of an aggregate of $23,250 representing 2.5% of the gross proceeds raised by each of them.

Pursuant to applicable securities laws, all securities issued pursuant to the Offering are subject to a hold period of four months plus one day following the closing of the Offering. The Debentures will not be listed or posted for trading on the TSX-V.

This news release does not constitute an offer of securities for sale in the United States. The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and such securities may not be offered or sold within the United States absent U.S. registration or an applicable exemption from U.S. registration requirements.

Getting Your Business Through a Financial Crisis

No matter how well you run your business, you are never immune to a potential financial crisis, either within your own company or in the general economy. That’s why it makes sense to plan for the worst as you hope for the best. Here are some tips to help you navigate through a financial crisis:

  1. Know what to do if you suddenly need funding. A cash crunch can occur for many reasons, including a lull in sales, good sales but thin profits, poor cash management and forecasting, and suddenly higher costs. You should establish a relationship with a commercial lender, like IOU Financial, so that you can quickly arrange for a small business loan when you need it. There are many ways to boost your company’s credit, see here for a rundown of available avenues.
  2. Streamline your operations. Streamline by improving cash collections and extending payment distributions. You’ll find many vendors will accommodate you when you’re in a crisis, because it’s in their interests for you to remain a viable customer for their offerings.
  3. Check your margins. If sales are good but profits are low, then expenses are out of control. If you don’t have one, institute a purchasing policy and system to buy your supplies and inventory from the right vendors at the most competitive prices.
  4. Manage your budget. You do have a budget, don’t you? It should include a forecast of cash flows so that you can identify and prepare for upcoming shortages. By comparing estimates with actuals, you’ll know where you are spending too much and can take steps to fix the problem. A budget is really a collection of sub-budgets, covering areas such as sales, operations, and cash. Online apps are available to help you calculate and manage your cash flows – take advantage of these, especially if you don’t have a financial expert on retainer.
  5. Boost sales. If your sales volume is heading downward, perk it up with advertising, promotions, sales and specials. However, discounting hurts profit margins, so a better strategy is to find ways to upsell and cross-sell to your customers, offering them added value for a modest additional cost. One way to gain visibility is to participate in community events and charitable functions. Re-evaluate your offerings and get rid of unprofitable goods or services.
  6. Sell assets. Another quick way to raise cash is to factor your accounts receivable and auction your inventory. These solutions are not as good as obtaining a small business loan, because they can have long-lasting negative effects on your image and your customer relations. Nonetheless, it’s a tool that works and it’s there for you to use. If you have multiple locations, consider closing some of them.
  7. Hire a CPA. If you find yourself repeatedly running short of cash, perhaps you’re not managing your finances well. Hire a CPA to consult with you and prepare monthly statements so that you have a better idea of what problems your business is facing. It wouldn’t hurt to become more financially literate, if that’s a problem.
  8. If your company is small- to mid-sized and you don’t have a CFO, you can rent CFO services to strategically help by establishing financial discipline and performing analysis and planning with regard to your long-term financial needs.
  9. Consolidate and reduce your debt. If you owe money to many creditors inside and outside your business, get a consolidation small business loan so that you can manage your debt effectively and hopefully pay it off faster. IOU Financial provides daily automatic repayment to take the pain and confusion out of managing your debt.
  10. Raise credit payments. If you have a lot of late-paying customers, raise your credit requirements and tighten up your credit terms. That means you need to communicate and enforce late payment penalties.

As you can see, the common denominator of all these problems is cash, or lack thereof. Your ability to borrow and raise cash may be all that keeps you afloat during a financial crisis, so be prepared and work out a plan for when bad things happen to good businesses.