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Get Your Finances Straight for 2017

With 2017 upon us, it’s an important time for taking stock of your business’ finances and setting right whatever issues are unresolved. Here are 9 tips you can execute right now to get your finances straight:

  1. Update your business plan: Several sections may need updating. What was the last time you analyzed your competitors or reevaluated your marketing plan? It’s easy to let these things slip, but important to bring them up to date. You will, of course, want to also recast your financial projections and budgets for 2017 in light of current conditions. Check out our Business Budget Smart Sheet to help you whip your budget into shape.
  2. Stay informed about health care: Donald Trump has promised to repeal Obamacare. This will have unpredictable repercussions for companies with employee health plans. It would be wise to anticipate the worst, which is health insurance costs rising substantially. On the other hand, you may no longer need to provide health insurance, which might save you a ton of money. The best advice is to stay informed.
  3. Reassess your capital structure: Do you have enough capital to fund your operation and expansion in 2017. If you plan to grow your business at the start of the year, now would be an excellent time to line up a commercial loan from IOU Financial. Our streamlined process can provide loans of up to $150,000 in as little as one business day. Whether you plan to move to bigger quarters, increase your inventory or add another shift, an IOU Financial business loan can get you ready for 2017 with the capital you need, quickly and hassle-free.
  4. Set aside contingency funds: An excellent 2017 resolution would be to earmark some of your profits for a contingency fund to handle unexpected cash crunches. A proper emergency fund should be able to keep your business afloat for three to six months. You can, of course, supplement your contingency fund with a quick loan from IOU Financial. Unlike a bank, we respond to emergencies immediately with fast funding.
  5. Review your insurance policies: You should review at least once a year your liability insurance, key-person life insurance, health insurance and so forth. The insurance market is quite dynamic, and it’s always a good idea to find out whether money-saving policies are available.
  6. Stay informed about 2017 tax changes: We already mentioned the Obamacare changes that are brewing. Mr. Trump has also promised a giant tax cut for businesses and a relaxation of regulations, all of which could have a major impact on your business finances. If necessary, confer with a tax specialist to ensure you understand the latest rules.
  7. Check the latest salary guide: Every year, several publishers put out the latest industry salary guides. See how your pay structure compares to your industry statistics – you may need to modify you pay structure if you are looking to recruit good people.
  8. Use cash accounting to advantage: Many small businesses use cash accounting, in which income is recognized at collection and expenses realized at disbursement. To lower your 2016 tax bill, prepay expenses and delay collections. This will shift some profits into tax year 2017, giving you an extra year to hold onto them, when tax rates might be lower.
  9. Evaluate your offerings: Depending on what type of business you run, it might be a good idea to look at the products and services you offer and see whether some changes are in order. If you are a merchandiser, you can look at your mix of products and eliminate the weakest performers, and/or extend your range of merchandise to new areas.

One last thing: Happy New Year from your friends at IOU Financial!

IOU Financial is Expanding Its Fast, Easy Loans to Canada

The demand for business lending in Canada is red hot, according to official statistics from the Canadian government. The Biannual Survey of Suppliers of Business Financing, last updated for the second half of 2014, shows business lenders disbursed 9.6 percent more money compared to the first half of 2014. That reflects the highest growth rate since 2011 and continues several years of consecutive increases.

Figure 1 Value of Credit Outstanding and Disbursed to All Business (CA$ billions).

Figure 1 Value of Credit Outstanding and Disbursed to All Business (CA$ billions).

The figure clearly indicates the need for significantly greater lending resources in Canada, which is why IOU Financial, one of America’s fastest growing commercial lenders, has launched its Canadian business loan product. With this lending program, Canadian small businesses – both English speaking and French – are able to borrow money in as little as one business day.

Canadian small businesses will appreciate the many advantages we offer to small- and medium-sized enterprises:

  • Quick Application: If you are accustomed to the mountain of paperwork banks collect from prospective borrowers, you’ll be astonished at how quickly you can apply to IOU Financial. It takes 10 minutes or less, and you can get a pre-approval right away.
  • Convenient Repayments: Unlike many conventional lenders that hit you with a huge monthly payment, IOU Financial collects daily fixed payments directly from your bank account. This greatly reduces the impact on your working capital.
  • No Upfront Costs: There are no upfront costs or hidden fees when you deal with IOU Financial. The application process is completely free and no-obligation.
  • No Prepayment Penalties: You can repay your balance at any time without penalty. We charge simple interest on our loans, which means you pay interest only on the principal you owe, not on accrued interest.
  • Affordable Rates: Our loan rates start as low as 6 percent. Our rates are half of what you would pay for a cash advance.
  • Loan Renewals: You can renew your IOU Financial loan after you’ve repaid 40 percent of the principal amount.

The Power of “Yes”

The biggest difference between IOU Financial Canada and ordinary banks is that we do everything possible to get you funded quickly, whatever your credit history or score. You see, we look at the whole picture when you apply for loan, including your company’s equity and cash flow. Many of our customers in the U.S. come to us after being turned down by a conventional bank. We are proud of the fact that we approve 85 percent of applications, based on the overall health of their business.

Our clients rave about our services. Voodoo Vapor Inc. told us, “We received our funding from IOU within days and it enables us to put newer product on our shelves more frequently. This gives us more reasons to engage with our target market on social media, attract new customers, and build relationships with loyal customers.” You can read the full case study here.

Our staff is ready to assist you with any questions you have! Canadian merchants and brokers are invited to call 844-750-5468 for more information on how the IOU Financial small business loan product could impact their business.

How Alternative Lenders Can Help You Get a Loan, Grow Your Business, and Build Good Credit

In order to grow your business, capital is critical. While larger businesses might have stock offerings or equity loans from major investors, small businesses often have to rely on loans. A loan can be the key to accelerating business growth – it means a small business owner can buy new equipment that will increase production, hire new employees, or purchase new inventory. However, getting a loan often means your credit will be put under the microscope, which can spell trouble for small business owners trying to get a traditional loan. For small businesses it makes sense to look for a lender that can understand their unique situation. That’s where alternative lenders come in.

 

Small businesses may have bad marks on their credit due to past problems with liquidity (their ability to meet their short-term liabilities), and that can hurt their chances of obtaining a traditional loan. However, alternative lenders understand that a short-term liquidity challenge should not be extrapolated to assume that the business will become insolvent. For example, smaller businesses have fewer customers, and if one of the customers is late paying their invoice, this can greatly impact a small business’ ability to pay their bills and meet other financial commitments. This is just one of the nuances of credit decisions that are unique to small businesses and that alternative lenders like IOU Financial handle on a regular basis.

 

What are credit decisions based on?

A business’s credit is based on a multitude of factors including: the length of time in business, the amount of debt a company has relative to its credit and to its cash flow, and payment history. However, sometimes a new business has trouble getting any credit, and having no credit available can sometimes be looked at like having maxed out your credit – not good. Gaining new credit through something like an alternative loan can actually be a positive for a credit score. By building good credit, as you make payments on that credit and pay the balance down, your company’s credit rating will improve. A better credit rating means a company is more likely to gain access to new credit in the future, and it also impacts the interest rate they will pay on that credit. A loan to make improvements can also help companies increase revenue, another way a business can improve its credit.

 

What do alternative lenders base their decisions on?

Alternative lenders like IOU Financial know that credit is important, but it is just one chapter of the story. There are things beyond just credit score that we look at. We want to see the whole picture of your small business: Are you generating revenue? Is your revenue increasing? Where does your revenue fall in line with your expenses? What are your day-to-day bank deposits? For a business to be financially healthy the balance of assets, liabilities, and equity should be analyzed as well as an assessment of solvency and liquidity. In sum, you need to have the cash flow to pay your bills and make payments on the potential business loan. Of course, we will also see what the loan will be used for and if it will decrease expenses and increase revenues. A holistic assessment is necessary.

 

Want to see what alternative lending can do for you? Talk to an IOU Financial Small Business Loan Consultant and learn about the ways IOU Financial can help you get the capital you need.

Why Your Business Might Wow an Online Lender but not a Bank

Banks operate under a different set of specifications when it comes to business lending. They often offer many additional services, and as such, have traditionally taken a more conservative approach to selecting businesses to lend to. The most obvious characteristic that banks emphasize is credit score. Less than 800 (out of 850), and they’re usually not too impressed. Of course, with a credit score that high, it’s not hard to find organizations willing to lend you money.

Making It Real

Alas, most small-business owners can only dream of that kind of credit score. It’s no secret that when you’re running your own business, decisions have to be made that might negatively affect your credit score, even if you’re running a very successful enterprise. That’s why it’s a shame when we speak with an owner that thought the only place to secure a business loan was from a bank, and had been repeatedly turned down. Our mission is to reach business owners that know that there is more to a successful business than a credit score.

What’s the difference between how an online lender and a bank might view your business? Two words: cash flow. You see, online vendors value your cash flow as much as your credit score. If you have a business that generates day-to-day cash flow, we know that’s impressive, even if your credit score is sub-par. That’s just one of the reasons online lenders have a much higher loan-approval rate than banks. Here at IOU Financial, we pre-approve 85 percent of the business loan applications we receive.

Keep in mind that no loan officer at a bank was ever fired for saying no to a loan application from a business with a lower credit score. Unfortunately, their current lending procedures don’t take into consideration lots of other factors that can be used to measure a business’ health, growth, or ability to pay back a loan. Providing additional information that a bank hasn’t asked for can create confusion and almost never has a positive impact on gaining approval.

WOW Factors

Online lender on the other hand, look at a variety of other factors.  Wondering which ones really impresses us?  Here are 5 more factors that that you can use to wow an online lender:

  • You own at least 80 percent of the business you operate, or 50 percent if you partner with your spouse
  • You’ve owned or purchased a business that’s been operating for at least one year
  • Your business generates at least 10 bank account deposits per month (we’re talking about retail and e-commerce businesses)
  • You have at least $100,000 in annual revenue
  • Your business bank account has an average daily ending balance of at least $3,000.

Meet these criteria, and we’ll say. “Wow.” Unlike a bank, online lenders can typically provide you with an answer the same day or even immediately. Our advanced software quickly evaluates dozens of data points like the ones listed above to provide you with an immediate loan decision.

As an online lender we also appreciate the fact that your reasons for borrowing vary from one business to the next. True, almost half of our customers use our loans to purchase equipment, but a sizable number put the money to work expanding their business, plugging a temporary gap in cash flow, purchasing/building inventory, or pursuing some other goal.

Turn the Tables and Let an Online Lender Impress You

OK, we’ve made it clear how you can impress us. But we also want to wow you too. One way we do this is by taking the red tape out of our 3-minute business loan application process. Not only is it quick to apply, when approved, your money will be available within a day or two, and deposited directly into your business bank account.

Worried about the interest rate?  Believe it or not, online lenders; rates can be very affordable, and often much less than the cost of merchant cash advances. Your loan is repaid with fixed automated daily payments made directly from your bank account, helping you avoid big monthly payments that are due all at once. What’s more, at IOU, we never charge you upfront costs to apply or qualify for your loan, we are happy to renew loans once you’ve repaid 40 percent of the principle, we don’t charge pre-payment penalties, and we charge simple (not compound) interest on your unpaid principle.

So what are you waiting for? Does your business have some of the wow factors we mentioned? There’s no reason to wait. Find out for yourself how easy it is to apply for a loan today.