What Type of Lender is Right for My Business?

by Crestmark 10. July 2014 05:54

When business owners or executives first realize the need for working capital, it can be difficult to know where to start. People often ask, “Should I call my local bank? What about non-traditional lenders? What’s the difference between the two?” We hear this all the time, and wanted to provide a resource to help! 

We recently released an Infographic titled “What Type of Lender is Right for My Business?” This provides a quick and easy reference piece for prospective borrowers to determine whether they’d be better suited pursuing a traditional bank line of credit, or to look into alternative financing. Each lending option has unique characteristics, and this infographic helps clarify how different business situations are best suited for certain lending options. 

The infographic follows a flow-chart format, and leads users through a series of yes / no choices about their business. Key points that determine the right fit include: 

- Does your business have three or more years of positive business history?

- Do you have limited or negative equity?

- Do you have limited or inconsistent profitability?

- Do your assets exceed your liabilities?

- Does your business have positive trends?

- Are there opportunities for growth?

By answering each of these questions, it’s easy to see whether your business may qualify for traditional or non-traditional lending. We are excited about this release, and hope that many businesses find this useful! 

              is alternate lending right for my business

Are you in the market for a business loan? If so, ask yourself the questions on this infographic and then give us a call to discuss! We’d love to help walk you through the process of figuring out what lending option would be best for you and your business. 

 

 

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Business

Manufacturing in the US – Where it’s Headed, and How to Finance It

by Crestmark 3. July 2013 10:52

For years, American businesses set up their manufacturing plants in foreign countries to take advantage of inexpensive labor. Recent changes to the United States economy are turning this trend around, however, and the U.S. is becoming an increasingly attractive option for manufacturing. It's not just American companies that are returning to the U.S. for these purposes: foreign businesses are offshoring their operations to the United States, too. 

One major reason for the sudden upsurge in U.S. manufacturing is the boom in shale gas production, which is helping to drop energy costs across the country. This affordable fuel helps to make the U.S. an attractive option for commercial manufacturing. Many companies that chose to run their manufacturing operations in other countries are finding that it can actually be cheaper to keep those operations in the U.S. Moreover, European companies are taking advantage of cheap gas prices and an available labor pool since natural gas in the U.S. costs roughly a quarter of the European price. 

manufacturer financing 

Although many companies point to labor costs as a good reason to outsource manufacturing jobs, the truth is that domestic operations are often the most cost-effective choice. Labor costs are rising in countries like China, where wages have grown a staggering 500 percent in the past 13 years, and are forecasted to continue to grow by 18 percent each year. Compare this to American wages, which have remained steady in certain areas over the same time period.

When looking at the total cost of ownership for any operation, many businesses are discovering that the expenses of energy consumption, delivery, freight, packaging, and other production costs are actually higher when the manufacturing is completed overseas. When GE moved its production from China to Kentucky, it experienced a 20 percent decrease in expenses, and other companies are seeing similar results. 

This "manufacturing renaissance" is good news for businesses who can reduce their expenses and streamline their operations by keeping them on domestic soil. It's also good news for American workers, who can begin to fill these positions, which will stimulate the economy and help increase demand for other goods and services to support the new manufacturing operations. 

Crestmark works as a lender to a variety of manufacturing related businesses. For details on how we may be able to provide financing for your business based on your accounts receivable, inventory and machinery/equipment, contact one of our lending experts today!  


 

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Industry Financing

Financing the US Oil Boom

by Crestmark 22. May 2013 10:59

Although scientists have known about the presence of crude oil in North Dakota for decades, it wasn't until 2008 that technology made it possible to extract oil from the rocks of Bakken shale. Now, with fracking, North Dakota is home 200 active oil rigs, and it produces around 20 million barrels of oil each month.

oil financing

This oil boom is a tremendous boost to the economy. While other parts of the nation have suffered through a recession, North Dakota has enjoyed the lowest unemployment rate in the country. The population of some small towns has doubled in recent years due to the influx of workers for the oil fields. The benefits of the Bakken shale oil fields have spread to other areas of the United States and Canada as well.

While the huge increase in oil production is great for the economy, it would not be possible without access to working capital to support the growth. Crestmark is proud to partner with companies in the oil & gas industry to provide financing solutions to support their businesses. Capital is often needed for pipeline expansion, refineries, staffing, trucking, machinery, temporary housing and many other things. Through a variety of lending options, Crestmark is able to offer flexible financing to help continue the growth in North Dakota and throughout the United States.

As the oil industry grows, it provides a trickle-down effect that strengthens the local economy as well. More workers moving to the area creates a new demand for restaurants and supermarkets, car dealerships, and many other services.

All of these new businesses also require access to working capital to get up and running. Not only is Crestmark equipped to handle to financing needs of large oil & gas companies, but we are also a strong partner to small businesses, offering SBA loans alongside our asset-based lending, accounts receivable financing, and factoring programs.

To speak with a lending expert, give us a call at 888.999.8050 or fill out our online contact form.

 

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Industry Financing

The Need for Flexibility in Fast Fashion

by Crestmark 25. April 2013 02:57

"Fast fashion" is a term used to describe the newest trend in high-fashion apparel. In order to compete with second-hand stores and bargain brands, some formerly high-price designers have begun offering large quantities of affordable, attractive clothing engineered to capture a buyer's attention and inspire an impulse buy. In order to keep profits high, designers must release a constant stream of affordable and desirable clothing.               

             textiles financing


The key to success in the fast fashion industry is creating a product that provides an irresistible temptation—it should be something customers want now. Creating this environment requires the designer to be flexible and courageous, and designers must be able to change their tactics quickly to keep up with market demand. Fashion today is an industry with a short shelf-life, and this creates a unique set of requirements for financing any fashion business.

When looking for a lending institution to finance your fast fashion business, you'll need to choose  a lender with a quick turnaround and competitive rates. Your profit margin will be slim, especially in the beginning, while you focus on building a loyal customer base and establishing sourcing relationships, so keeping your costs as low as possible will enable you to maximize profitability. Moreover, a fast-paced industry, such as fashion, requires a  financial partner that can respond to  your needs quickly, not one that labors over decisions or credit applications.

Other attractive features in a lending relationship include options for import or export financing. As your business grows, you may want to expand beyond our borders and begin marketing the product overseas, and export financing is an important tool in that process. Similarly, importing product can help keep prices down and make it easier to keep up with a competitive industry but only if you have a financial partner that both understands your trade cycle and offers competitive import financing options.

Finally, finding a lender who is flexible and who can add value to your business is crucial. Any time you ship product to customers, you run the risk of not being paid. By choosing a non-recourse factor, you can reduce the credit risk to you posed by these circumstances. For any fast-moving business with uncertain profits, this is extremely important.

Launching any business comes with risk, but choosing the right lending institution will help mitigate these risks and increase your chances of success.. Careful research, coupled with  an understanding of your needs, will help you find the right financial fit. In choosing the right financial institution, to finance your fast paced, fashion business, you will be placing your business in the best place to succeed. 

 

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Industry Financing

Seven Questions to Ask Yourself When Testing a Business Idea

by Crestmark 8. April 2013 06:45

Most people have come up with a potential business idea at some point in their lives. After all, the idea is the easy part. Before investing time or energy into a new business, it's important to critically analyze the idea to ensure it will be a smart use of resources. Here are seven things every new business owner should consider before moving forward and getting serious with an idea: 


1. What is the customer profile? There’s no sense in starting a business without any customers, and the better you understand your potential market, the more likely your business is to grow and succeed. The current state of the economy makes it even more crucial to take some time to research your target audience because targeting everyone in general will be too expensive. Who are your potential competitors targeting? You might find they’re missing out on a niche market you can take advantage of once you’re in business.

2. What resources are needed? Understanding the full, up-front cost of a project is vital to ensuring its success. Consider the cost of materials, labor, advertising costs and other expenses. Will the costs outweigh the profits? If an idea isn't financially feasible, put it on hold for a later time.

3. What is the purchasing cycle? The longer it takes for profits to reach the business, the more money must be spent up-front. Understanding your purchasing cycle beforehand will help with budgeting. Once you’ve decided to move forward with an idea, remember—whether your business will have a short cycle like most retail stores, or one that lasts for months: find ways to reach your customers at each point in the cycle.

4. What product or service is this replacing? In order to effectively sell something, a company must convince its customers to buy its products instead of something else. Determine what item customers will be willing to give up in exchange for the service offered by the new business. This will also help when the time comes to advertise the product.

 

sales forecast5. What is a reasonable sales forecast? Determine how many sales can be reasonably expected, and compare this figure against the production cost of the item or service. For example, a restaurant owner might consider the occupancy of the restaurant, the average cost of a menu item and how many people could be expected to stop in on an average day. It might help to review competing businesses to draw estimates from their data. 


6. How much growth potential is there? If you’re producing a hand-crafted item, for example, can it be mass-produced if the demand requires? Services that must be rendered by a skilled individual cannot be produced in high quantities. Leave room for growth, but establish limits early on.

7. Will the idea be viable in several years? Some business ideas seem appealing at first but would not be attractive in the long haul. Before deciding on a new enterprise, an entrepreneur needs to decide if he could be happy at that same business two, five or even 10 years down the road.


Of course, a successful business needs more than a smart idea, but testing each new idea against these criteria will help to create a secure foundation for the business to grow upon. 

 

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