Showing posts with label Loans. Show all posts
Showing posts with label Loans. Show all posts

Thursday, 31 August 2017

5 Financial Questions to Answer before Starting a Business

It is very essential that while starting your own business venture, you should properly plan before and then make required financial decisions. As in this way, you will be able to manage your money efficiently once your business starts operating.  Starting a new business might bring uncertainty, and certain situations may arise where you have enough cash flow and you need few alternative options too. That is why it is important to know whether you can answer below five questions related with finance before embarking towards new business venture.


1. If You Need Additional Working Capital, What Will You Do?

In order to bring their goals to fruition, several business owners need additional funds. So, at the initial stage of your startup venture, you must research on your priorities, as it will help you in preparing yourself id in case there is a need of additional financing for your business venture. There are two options which can be considered: Loan financing or Equipment financing.

If you are considering loan financing, it is quite essential to work with that lender which gives realistic term and amount for your business. And if your startup business is service or product based, with the required equipment is essential to keep your business operate smoothly. For the first time, upgrading, replacing or purchasing may put a severe pinch on the owner’s  cash flow but with the precise equipment financing, you can obtain those things which your venture needs without building a considerable dent in the bottom line.

2. For How Long Can You Live Off Your Savings?

While starting your own business venture, it is important to know if you have to live off your savings, then will you be able to do so or not and if yes, then for how long. As it is necessary that you should monitor your business expenses which will further help you in living within your means.  


3. What is The Importance of Business Debt Management?

Business debt management is important because it can help you in retaining your business status. As if you are not able to handle your business debts, then there is a possibility that it may result in bankruptcy or even compel you to shut down your business, which in turn will affect your credit too. So, it becomes quite tough to get any kind of credit after the discharge of bankruptcy.

4. Know What Amount of Debt Is Necessary For the Business

For successfully establishing your business, debt is very important. The reason behind this is that apart from equity financing; for establishing your startup business you can opt for obtain debt financing. But, it is essential to have right form of debt and more debt can play havoc with all the personal finance.

5. Can You Responsibly Manage Your Cash Flow?

From the start, the cash flow projections are driven by your operating cash flow. Ideally, operating cash flow is being projected either weekly or monthly for determining whether you need support from funding activities. As investing activities are designed on this basis for several businesses. Until and unless you are not in a progressive growth phase that needs purchase of assets, you will not have enough cash for further investments. As this tends to be larger transactions, they have considerable impact on cash flow of your business. Usually, it has been observed that financing activities refer as plug in the model of your business cash-flow. Any insufficiency in investing or operating cash flow can be covered with money from various financing activities. As it takes time in finding potential lenders or investors in getting cash, it’s better to know in advance how much and from where your business will get funding for balancing its cash flow.

Hopefully, now you can answer five finance related questions before starting your business venture. As if you are financially responsible from the initial stage them your business venture might have a better way of succeeding.


Alcor M&A is a leading advisory firm providing financial services with an emphasis on customized solutions in the areas of M&A advisory, Joint Venture Advisory, Financial Advisory,  Private Equity,  Debt Financing  and International Business Development. These services leverages insights, relationships and a culture that emphasizes a strong orientation towards excellence.


For additional information on how ALCOR MNA can help you Grow your Company, Complete the Enquiry form One of our representatives will contact you within one business day.  



Friday, 18 August 2017

Debt Financing Is Key to Success of Business :: Startups :: Entrepreneurs

Debt financing is the cash to be repaid in the form of a line of credit, advance merchant cash, a loan, or a credit card. It involves the usual pitching to venture capital firms and investors for raising money in exchange for equity in the company. However, it is not the only way of raising capital for an organization rather it can also help in other cases too. Using loan for obtaining capital or growth funds for starting a business is referred as Debt financing. It allows businesses to get the money they require for their business without giving away equity. Provided businesses can continue with the payments of interest and pay off all they owe and will get to maintain all the remaining proceeds in the coming years.

Most important thing to consider in debt financing is to prepare a timetable for your business growth. As, if the business expansion happens in a couple of years, make sure that the loan does not need unmanageable payments done on monthly basis. Depending on how much cash you have borrowed, the terms are decided and where will you use this money. Most the small business lenders mainly work with particular industries and provide good rates to the right organization.


Advantages of Debt Financing

Debt Can Fuel Growth

Long-term debt uses include buying hiring new workers, inventory or equipment, and increasing marketing. The long-term loan can provide your organization required working capital by taking out a low-interest in order to keep your company’s working smooth and profitable all the year.

You Don’t Have To Give Away Equity

One of the best pros of debt financing for a startup business is that you don’t have to give away business share equity, which in turn will keep full control over the business.

You Don’t Have To Claim on Future Proceeds

As long as you owe the debt, debt financing will only permit you to pay the agreed-upon sum. Without allotting further money to your lenders, you have to keep all of the proceeds once debt obligations are completed. The money is all yours when you pay off what you owe, even if startup business is purchased for millions of dollars.


Drawbacks of Debt Financing

Obligations on Payment

Lenders expect that you pay off your debt like clockwork even in difficult times as they don’t have a stake in the business.

Assumption of all Business Losses

 You are the sole responsible for the all the risks, when you are the only owner of the business. When you fail then not only you need to assume your losses, but those of lenders too, as they can sue you if you can't complete your agreement.


If you have already decided that extra funding will help your business in growing to the next level, it’s really important for examining benefits of debt financing. Furthermore, with plenty of debt financing solutions, first review how you can make use of effective debt for complementing several funding sources and help technology organizations in raising required capital within specific time frames needed for M&A processes. An acquisition well-executed might be powerful tool for driving growth and enhancing investor’s value for technology-based companies. So, it’s better to take time in determining the strategy of optimal financing that will help in ensuring that your acquisition is successful.


Alcor M&A is a leading advisory firm providing financial services with an emphasis on customized solutions in the areas of M&A advisory, Private Equity, Debt Financing and International Business Development. These services leverages insights, relationships and a culture that emphasizes a strong orientation towards excellence.

For additional information on how ALCOR MNA can help you Grow your Company, Complete the Enquiry form One of our representatives will contact you within one business day.
                     


Wednesday, 9 August 2017

Working Capital Loans for Small Business Ventures

Nowadays, Small business owners are facing numerous obstacles while running their companies. Often, various business owners of small as well as medium-sized businesses derive immense satisfaction in tackling these challenges, but it might happen that these processes cause headaches also. Most often when they are asked about their biggest professional demand, one thing that tends to be on the top is the challenge of getting access to working capital for managing cash flow. In other words, you can say that for covering every ongoing expense there is enough flow of working capital. A no. of reasons exists behind the cash flow is a steep challenge for owners of small businesses as they require precede revenue. Perhaps, it might happen that you are getting paid by your clients more slowly than what you expected.


Often, owners of small business venture might help in optimizing cash flow through the negotiation of long payment cycles with all the creditors and encourages debtors to pay as soon as possible. But there are various other solutions that might help you in sailing with plenty of working capital through the lean months. And you have two possibilities namely merchant cash advances and short-term business loans. One can put small business loans to work immediately for their business. For example, an owner of small business owners can use the working capital financing for meeting payroll of few months for negotiating an attractive inventory cash deal or to train and hire new employees.

Various business financing solutions, such as working capital loans for small business ventures might help in operating without missing a beat and can even make it possible in taking advantage of an unexpected business opportunity. Also, there are several hidden costs like the requirement of upgrading technology or unexpected equipment failure for improving efficiency as well as saving money in the long run. Interior remodeling, marketing, repairs, landscaping, and advertising might be important elements for your brand and ability for growing your business. Today in the highly competitive market where there is no time to waste, specifically while applying for business funding with lenders of working capital but working capital might be just a few clicks away.


At ALCOR, we understand all your small business requirement of working capital for keeping their options open and for pursuing numerous business opportunities that are continuously arising.  That is the reason ALCOR provides working capital to all the businesses across a variety of sectors globally. We also know that when a business owners need financing, they require it right now and not months or weeks from now, therefore we have made the application process so simple with a small amount of documentation and paperwork required. With ALCOR’s funding needs, you don’t need time for gathering statements and tax forms. Instead, we speak with the owners of small businesses learn their company’s unique visions for the future.


Furthermore, while starting a small business, one needs working capital financing for investing in inventory and accounts receivable. Using a formula of assumptions, one can get to know how much money is needed for working capital can be estimated on “Turnover Rates” for accounts receivable, inventory, and accounts payable. So, if one is the small business owner and is in need of working capital financing, then he must avoid high price related with financing products such as merchant cash advance, factoring, and peer-to-peer online lending, and lower cost financing opportunity available through your local Community Development Financial Institution (CDFI). 


For additional information on how ALCOR MNA can help you Grow your Company, Complete the Enquiry form. One of our representatives will contact you within one business day.
                     

Thursday, 27 July 2017

How to Bootstrap Your Start-up

Nowadays, it has been observed that new entrepreneurs used to believe on the myth that they only require a minimum half million dollars for starting the business. The process of starting a new venture with limited budget without the involvement of investors is termed as bootstrapping. Also, it is the only way to continue starting new business, if you don’t want to spend months in preparing sales pitch and delivery circuit. Additionally, through bootstrapping there is neither risk nor pressure of an investor being your boss who will be guessing your each move. Borrowing money under right situation can give the boost to small business which it needs to reach its next milestone or to get off the ground. There are several options available to small business owners’ seeking out loans and credit, but it’s essential to know which finance lending option is better for your business and for demonstrating that your small business is a good risk, what information you will need.


It has been observed that start-up business mainly rely on personal loans from friends, family or borrow against credit cards for funding their ventures. Business loans as well as lines of credit are easier to obtain more established businesses, as they have a track record of management and cash flow to report. Still several other small businesses look Private equity, Venture capital, Seed capital, Growth capital, Working capital and Mezzanine financing as an alternative of traditional bank loans options. Below are some ways that may help you in determining the type of lending that suits your small business at any development stage. A common list of startup practices done by new entrepreneurs in managing the ironic pain and without taking help of investors started new venture with limited budget are discussed below:

Business Credit Cards

If your business is incorporated, get a credit card for it in order to keep finances of business and personal expenses separate. As this will help you in keeping record of your business expenditure and personal ones by categorizing expenses, and will help in you in establishing good credit history at the time when your business needs urgent funding. But always make sure that long-running balance along with high interest rates might eat profits of your firm. And your credits can be damaged, if you fall behind on payments. Always restrict your card usage to important business functions, as well as keep your balance below or at 30% of your credit limit.



Borrow From Friends or Family

Most of the start-up business owners look for family or friends for initial funding of their business without any established business history. So, its better look for those friends or family members who can give you cash and business guidance as well. Prepare a business plan and ask for enough funds that take the business to the next level and it will be easy to lend money again if you prove him that you will repay on time, if in case you need it later.

Line Of Credit

For ongoing needs such as inventory management or seasonal payroll, a line of credit many proffer an open-ended access to cash if your small business has uneven cash flow. You can still qualify for the full requested amount, and then one can borrow as well as repay funds on the time. For long-term investments such as property purchase or making larger equipment purchase, then a line of credit is not appropriate. So, better be prepared for submitting financial details of business plus tax returns and information of bank account for securing the credit. Furthermore, yearly financial review is also required.


Stick To a Business Domain

It is not good to start a new venture in a place where one has no prior experience although it proves to have great potential. Every business comes with unwritten rules and if you lack any inside business knowledge, it will cost you a lot. It has been seen that good connections can be done at low prices.

Find Team Members to Work

People who are working with you should understand the startup failure rather than expecting money up front. It is quite expensive and difficult to manage contracts as well as employees and entrepreneurs who have just started a new venture are not good in any of these things. In certain cases, equity proves to be best guarantee of focus and commitment.



Defer Your Urge to Find Office Space

Today, team members of remote startup are the norm and may be very creative with video, smart phones as well as speedy internet. Also, office spaces costs cash up front, need equipment, staffing as well as travel expenses and through a good website, your venture may look big like of any competitor.

Moreover, small business lenders give loan to businesses that was operating profitably for continuous two years. A broad range of documents are required to be provided to the small business owners, so that the lender can easily analyze cash flow as well as the ability of company to repay loan along with interest. Also, first thing you should do is to calculate the actual financing cost, then project your monthly cash flow accordingly in order to see at what stage you might require need extra cash. And always remember that lenders may not provide 100% finance. Consider whether the funds borrowed by you will help in generating more revenue in the coming years or not because if not, then you may be better off waiting. Rather leverage any capital infusion through which you can get into sales and marketing, with the aim of generating cash for the business in the future. And in this way, you may not require to borrow again.

For additional information on how ALCOR MNA can help you Grow your Company, Complete the Enquiry form. One of our representatives will contact you within one business day.
                            


Wednesday, 19 July 2017

Working Capital Loans-Finance to Fuel your Business

If the owner of a small business is constantly searching for new methods for growing his company then working capital loan is something after which he won’t look further. A highly efficient way of growing his business and generating capital is by securing working capital with a line of credit or a loan. Growing your working capital will secure your small business during the sluggish months, making sure that you can cover up your everyday operational costs such as payables, payroll, and receivables. Also, it will help in mitigating your cash reserves for unavoidable circumstances you might face while doing expenditure on your business.


The available financing needed for covering short-term or immediate business requirement is referred as working capital. In order to determine how much working capital is available sum up your bank cash along with the money that customers owe you and your inventory value after that subtract what you owe to employees and suppliers. Small business owners always make sure that they have sufficient cash for not just starting a business but also keep it going. Lastly, you can also cover your business requirement with the help of personal funds by potentially harming your wallet. Often, working capital is quite difficult to find so it’s better to know the options that are easily available.



The Good Part of Working Capital Loans

Often, private equity investors ask for some business percentage in exchange of financing the business. And for getting funding for your business you give few decision making power as well as the piece of your enduring upside. Luckily, working capital loans only need you to execute the payments you agreed-upon. Working capital loans come up with a limited obligation to the person who has lent money that you carry out and then moves independently.

Terms are Shorter

The short term working capital loans help the small businesses. They are planned to secure your cash flow alongside small shocks to its system. Therefore, one can expect a controlled payback time to be a piece of the deal and stay away from getting caught in a finance trap. The last thing what a smaller business needs are the huge monthly payments restricting you in the coming years as often becomes credit card financing case.


Expenditure Stays in Control

Traditionally, a bank loan might have restricted fund usage which can turn into a blessing or a curse. If a small business owner gets a blank check, it may fight back to remain focused and end up exhausting the finances on other things rather on investing for what you have secured that loan. Typically, working capital loans are issued for particular opportunities and operational costs that raise revenue.

Get Cash Fast

Typically, bank loan applications are very time to take and time is something which can’t afford to lose if the business is restricted by the current cash flow. Often, they lead to rejection, and applying working capital loans for small business is a faster way of getting funds in comparison with the traditional bank loan approval process. Usually, one can gain access to his money within a week, in case he qualifies for a working capital loan. Every business requires cash for operating as well as for growth and as it grows certain changes arises then the requirement of additional funds may arise without warning, and traditional banking process might hinder the growth of your business which in turn causes missed opportunities.

                                                About ALCOR Mergers and Acquisitions


But now ALCORMNA is there as an alternative for funding your business to traditional financing methods. Our flexible, fast, as well as easy capital options, proffer the fund you need. And we make it sure that our short-term repayment means that you will grow sooner and faster. The funds can be used for any kind of business you want to do and it doesn’t require any proposal or business plan. Moreover, if you require extra cash in order to help in growing your small business, ALCORMNA is here to help. 

So is your business suffering from Funding problems? ALCOR MNA is experienced in finding the best Investors for companies and small businesses. We provide a broad spectrum of comprehensive fundraising solutions to cater the capital requirements of different companies across industries.

Are you looking for a Financing Options?

For additional information on how we can help you finance your Company, Complete the Enquiry form. One of our representatives will contact you within one business day.


Friday, 14 July 2017

HOW DOES A VENTURE CAPITAL FIRM WORK ?

Today there is a huge amount of money in the market of start-up funding across all stages of funding. Although there are a lot of financing options for start-up businesses available it’s up to the investor or the owner to decide which option is to be considered. One such option is venture capital, so let’s get an idea about the elephant in the room namely Venture Capital firms.

Venture Capital is a type of financing which is self-explained. Actually, it has firms or funds that offer venture capital which is high-risk capital supporting organizations and companies with the hope that they will provide a huge return on investment (ROI).



Within a Venture capital fund, there are two main elements: limited and general partners. People who are in charge of taking investment decisions, as well as work with start-ups business for growing and meeting their goals, are called as general partners. On the other hand, those who give required capital necessary for completing those investments are referred as limited partners. One can also say that limited partners offer the funds while general partners do the investments.

One of the major differences among Venture Capital funds and other investment vehicles is that Venture Capital funds do not invest own partners’ money in case of limited partners while general partners use to invest few of the amount through the fund which is approx 1% of the fund.



A venture capital fund makes money in two ways: carries (carried interest) and management fees.

Carry or carried interest: It is a profit share of an investment fund or investment paid to the manager in a surplus of the amount that he contributes to the partnership. In Venture Capital, carried interesting is mainly 20-25 %, which means the profit percentage among limited and general partners is 20% and 80% respectively.

Management fees: It is usually termed as the ‘cost of professionally managed assets’. Typically, venture capital funds pay management fee annually to the fund’s management company, in the form of salary and a method to cover fund and organizational expenses. It is usually computed on a capital commitments percentage of the fund which is about 2-2.5 %.



It is very important that business start-ups should identify the working of Venture Capital firms. Investors with one key objective in mind back start-ups for getting an ROI either in the form of money. It’s also important to note that Venture Capital funds have 10 years of fixed life, thus creating investment cycles lasting for about 3-5 years. After this firm start working alongside the business startups and the owners will scale & seek an exit, giving the returns they sought initially. Moreover, there is enough potential in venture capital firms, but it is essential to make sure that the chosen path is right for business start-up. Venture capitalists in exchange for the high risk they have taken by investing in your company, they basically get considerable control over decisions of the company. The venture can surely be a smart option for business startups that are willing or unwilling securing bank loans or completing debt offerings.


So is your business suffering from Funding problems? ALCOR MNA is experienced in finding the best Investors for companies and small businesses. We provide a broad spectrum of comprehensive fundraising solutions to cater the capital requirements of different companies across industries.

Are you looking for a Financing Options?

For additional information on how we can help you finance your Company, Complete the Enquiry form. One of our representatives will contact you within one business day.
 



Friday, 7 July 2017

Working Capital Loans for Small Businesses


In terms of accounting, working capital = current assets – current liabilities. Current assets have short term which can quickly converted into cash, mainly accounts inventory and receivable. On the other hand, current liabilities have certain obligations that may due within a year, mainly accounts payable as well as short term debt. In its current assets, working capital can be observed as equity of business. This presumes short term loans are used for short term needs while long term loans are used mainly for fixed assets financing. Often, working capital is incorrectly used in case of business financing needs, particularly for startup business. 


When a business is at its initial stage or an existing business that is increasing its customer base and revenues, the need for true working capital occurs. While starting a business venture, one needs fund for covering inventory as well as accounts receivable balances until they start the receivable collection. The first fund source is accounts payable, which signifies credit terms that have negotiated for purchases with the trade vendors.  Additional funds for covering working capital will come from outer sources. For a new startup business, this might be in startup equity form getting funds from family, friends or other investors. If there are modifications on how quick its inventory as well as accounts receivables turn into cash. For example, inventory and accounts receivables during a slow season turn cash at slower rate than the cash needed for doing payment to vendors.  These are actually the needs of working capital due to timing.



To get the answer of this question, one need to know how funds will flow through their business – or rather one need to know working capital cycle. The flow consists of two processes: how quick cash is used for paying current liabilities and how quick current assets turned into cash. The working capital cycle is termed as turnover rates for inventory, accounts receivables, and accounts payable.


In general, it is quite difficult for startups to get working capital financing from traditional source of banking. Although few small business owners might cover the needed funds from the equity raised by them but others might be lured to turn it through non-bank lending sources such as merchant cash advance, factoring, and online lenders.  These working capital financing sources charge annual percentage rates of 50 percent or more. For small businesses that are in operation and also generating profits, one will definitely reinvest for getting some more profits from the business. Also the business owners start reinvesting profits into inventory, using the profits for carrying out increased levels of receivables as well as using profits for paying trade suppliers.  Moreover, the maintenance of these profits enhances the working capital that might grow continuously.



While starting a small business, one needs working capital financing for investing in inventory and accounts receivable. Using a formula of assumptions, one can get to know how much money is needed for working capital can be estimated on “Turnover Rates” for accounts receivable, inventory, and accounts payable. So, if one is small business owner and is in need of working capital financing, then he must avoid high price related with financing products such as merchant cash advance, factoring and peer-to-peer online lending, and lower cost financing opportunity available through your local Community Development Financial Institution (CDFI).  


ALCOR MNA leverages its relationships with more than 100-major banks and financial institutions to arrange working capital facilities, both fund based as well as non-fund based, for its clients. The facilities are created either through multiple banking routes or the consortium(syndicate) route, depending on the size of the facility. We arrange the same at very competitive rates in the Industry. Select solutions offered by us under Working Capital includes the following:
  • Fund Based: Actual funds are disbursed or made available to the borrowers
    • Cash credit
    • FCNR
    • Overdraft
    • Factoring
    • Export Financing
    • Buyers’ / Suppliers’ Credit
    • Bills Discounting
  • Non-Fund Based: Actual funds are not deployed with borrowers, but these help the obligations to obtain credit facilities from third parties
    • Letters of Credit
    • Guarantees
    • Co-acceptance of Bills/deferred payment guarantees
Are you looking for a Financing Options?

For additional information on how we can help you finance your Company, Complete the Enquiry form. One of our representatives will contact you within one business day.

                                                  http://www.alcormna.com/working-capital

Thursday, 6 July 2017

Private Equity Financing

In the world of business, private equity financing is termed as way of raising capital by selling business shares to investors. The capital which is raised through private equity financing is not paid back in installments along with interest, unlike debt financing. In its place, investors become partial owner of that particular business by putting money in it. Then they are entitled to share profit of a business over time. Within three to five years, most investors wait for a return on their investment.

Friends and family is the common source of private equity for business owners. Unlike personal loan, once business starts making profit, investments done by family and friends are paid back, although it might take several years. Often, it has been observed that with the operating cash flow of business, business owners fix payments to investors. One can say that when the business grow and makes profits, investors also make money. And once they get specific set of return on their investments, they usually get rid of that business in which they are involved. Usually, family and friends investments are made at the initial stage of business but as it grow and proves its worth, the business start getting financing from angel investors . While venture capitalists and angel investors are lumped jointly as one funding source, actually they provide two different functions.


The Private Equity Advantage

As it is said that private equity financing is not for all but it provides greeting option for debt financing to several business owners. In fact, private equity financing against debt financing cannot be charged with two major gripes business owners’ level due to risk with personally guaranteeing a loan and the constraint placed by it on available cash flow. Private equity eradicates the drawbacks of debt in that and for paying down debt, it does not divert capital from the business rather it shares risk in the business along with the entrepreneur.

Another advantage of private equity is that you don’t need to pay right back to investors after they provide funding to your business. It means that one has more time for growing his business before he starts worrying about how he will how he will pay for it or not.  And in case business fails totally, one doesn’t have to repay. It is fact that investors either swim or sink or alongside the business owners.

Download Free Ebook

Moreover, private equity is actually an umbrella term for huge money raised directly from recognized institutions & individuals and pooled in a fund that mostly invests in certain range of business ventures. For considerable long-term gains, attraction is the potential. Generally the fund is placed as a limited partnership, with the investors as limited partners and a private equity firm as the general partner. Typically, private equity firms charge huge amount of money fees for taking part in partnership and be inclined to focus in a particular investment type.


Private Equity at Alcor MNA

With in-depth knowledge of the entire Private Equity investment process including– identification, initiation, structuring, valuation and execution– our team has the ability to execute transactions quickly and efficiently. AlcorMNA advise both listed and unlisted companies in raising growth capital. We perform in-depth due diligence on each fund that we consider, marshaling resources from across our investment team to identify, vet and select investments that can help clients achieve their portfolio goals.


Alcor has strong relationships with key global Private Equity players & venture funds and understands investment themes and priorities of various financial sponsors. This helps us connect growth companies with PE firms in a focused and timely manner.Our deal structuring expertise and capability to execute private equity transactions through every stage of the deal process is a key strength.


Alcor M&A is a leading advisory firm providing financial services with an emphasis on customized solutions in the areas of M&A advisory, Private Equity, Debt Financing and International Business Development. These services leverages insights, relationships and a culture that emphasizes a strong orientation towards excellence.

For additional information on how ALCOR MNA can help you Grow your Company, Complete the Enquiry form One of our representatives will contact you within one business day.