Regulatory Compliance Is a Constant (and Costly) Challenge for the Oil and Gas Industry

Just as it’s difficult to turn a large ship, it’s challenging for oil and gas companies to make adjustments to quick-changing industry-wide regulations. Every time they approach a turn, strategic remapping is required. Organizational costs can be considerable for petrochemical services companies that face continual regulatory revisions.

Eighty percent of the domestic oil and gas companies in the U.S. are small, often with fewer than 10 employees. In contrast to large international corporations, the numerous small businesses operating in this sector often have a hard time budgeting for state and federal compliance requirements.

Safety improvements to minimize hazardous risks are mandated regularly, with good reason. This means more and more oil and gas companies are utilizing automation and artificial intelligence for real-time data reporting, compliance and cost containment. The technology, tools and manpower needed for these stringent standards can be costly. Business owners in the oil and gas sector know that compliance carries a hefty price tag.

Additionally, the fickle nature of the market presents its own challenges for energy companies. Their profitability dips and spikes based on weather, geopolitics, and global demand, making their cash balance a constantly moving target. Smaller-scale industry suppliers might find their own finances in flux, as they feel the ripple effects of the larger marketplace. Excavators, water haulers, crane operators, inspectors and others may need working capital solutions to keep their business afloat in the midst of macroeconomics they can’t control.

Factoring frees up funding

It can be difficult for energy service suppliers to avoid and weather cash crunches. Factoring can help by advancing businesses the money they are owed on invoices, without waiting periods or delays. This form of accounts-receivable financing provides steady, dependable payment, in spite of market volatility. Instead of waiting for your customers to pay you, you may consider paying yourself immediately and letting a factor take care of administrative follow-up.

Because factoring provides an advance on your own money, you are not accruing debt, like you would with a traditional bank loan. This helps keep your money pumping through the business so you can sustain and potentially grow your operations. Factoring provides a cushion of security to protect your business from fluctuations in global consumption, production and pricing. This allows you to focus on doing the work, securing new contracts, paying your employees, or reinvesting in your own business. The market may be volatile, but your financial security doesn’t have to be.

Equipment as collateral

If you require a larger cash outlay for a new sensor system, vehicle, IT overhaul or piece of equipment, you may prefer asset-based lending (ABL), which allows you to use your existing rigs, pumps, haulers, or other assets as collateral for flexible lending arrangements. Or you could utilize an equipment lease to assist with the payments over time.

Whether you are part of the upstream, midstream or downstream sector of the oil and gas industry, there are potential financial risks and costs that can make your cash flow unpredictable. ABL offers predictably quick access to cash, with expedited approval processes and affordable rates. Even if your monthly balance statements are inconsistent, ABL offers generous options to harness your working capital.

Don’t let compliance costs overwhelm you

Because the oil and gas industry is highly regulated and operates in a complex global economy, many variables can affect operational costs; therefore, it is wise for businesses to develop trusted partnerships to help manage their capital-intensive financing needs. Gas price swings and governmental regulations should not restrict your ability to do business. With factoring and other working capital solutions, they don’t have to.

To learn more about our flexible financing solutions that can help you manage compliance and operational costs, call Crestmark at 888-999-8050. We are a trusted provider of financing to well-servicing companies.

Artificial Intelligence and Automated Staffing Are Here to Stay

The advancement of automation and artificial intelligence (AI) is not artificial at all. It is quite real.

AI technology has been working behind the scenes to bring convenience and aid to many areas of our lives. Based on past choices, Netflix algorithms predict what movies we like. Expedia provides an expansive alternative to travel agents. Investment managers rely heavily on automated stock pickers. And Siri and Alexa provide the masses with a virtual personal assistant.

Some artificial intelligence technology is more out-front and less behind-the-scenes, potentially posing a risk to certain professions. Grocery checkout clerks are being replaced by self-serve stations. Restaurant waiters are being replaced by orders taken at onsite kiosks, online, or through phone apps. Machines can turn wrenches and tighten bolts more reliably than line workers. And self-driving vehicles are being tested on the road.

A McKinsey Global Institute report on automation and employment estimates that about half of all the activities people are paid to do in the world’s workforce could be automated by adapting current technologies. That amounts to almost $15 trillion in wages. Still, less than 5 percent of occupations are candidates for full automation replacement. Most jobs require humans and technology to work together.

A Pew Research Center report on the future of AI found that 48 percent of experts predict significant worker displacement due to technology. But 52 percent expect that technology will not displace more jobs than it creates by 2025, and that new jobs and industries will grow out of automation. They cite the following reasons to be hopeful:

  • Technology advances may displace certain types of work, but historically advances are a net creator of jobs.
  • We will adapt to these changes by inventing entirely new types of professions, and by taking advantage of uniquely human capabilities.
  • Technology can free us from day-to-day drudgery, and allow us to define our relationship with “work” in a more positive and socially beneficial way.
  • Ultimately, we as a society control our own destiny through the choices we make.

The businesses that stand to gain are those who understand that while AI makes some jobs obsolete, it also creates a whole new sector of occupations and opportunities. Staffing experts in various industries are readjusting and re-engineering workforces to meet the needs of the future.

Reinventing employment and staffing opportunities

Christine Hoffman-Hicks of Staff Smart told Staffing Success Magazine that she hopes staffing and recruiting could become more automated, linking employers and employees using a model.

“Think about That is effectively where we are heading with recruiting. I would love to have that kind of algorithm, one that can go out and find people without you having to identify prospective candidates,” said Hoffman-Hicks. “You need this skill set, this geography, this price point? Boom, here are the people you need to talk to. It will minimize the time we spend on searching.”

It’s important to recognize that different skill sets may be required for emerging jobs, but it’s critical to define those skill sets and train employees to be proficient in them.

In demand skills for the present, and for the future

A presentation about working in the age of robotics from the World at Work 2017 Total Rewards Association Conference and Exhibition reported that the most in-demand cognitive skills are: design thinking, predictive analytics, and global mindset. The most in-demand collaboration skills are: inclusive leadership, digital leadership, and virtual collaboration. In practical terms, data presentation skills—organizing data so it is easy to understandare expected to be in demand, according to the professional networking site, LinkedIn.

The marriage of soft skillslike judgment and perceptionwith hard skillslike data collection and analysiswill ultimately be the basis for addressing the gap so businesses can adapt in the age of automation and technology.

Crestmark supports staffing solutions in a complex new economy

Businesses may need unexpected cash when they are challenged by payroll, staffing adaptations, growth spurts, temporary economic downturns, technology advances and other issues in the automated workplace. Crestmark is able to support these challenges by providing flexible and nontraditional borrowing options.

Founded by entrepreneurs and serving entrepreneurs, Crestmark has been providing staffing industry financing solutions since its inception in 1996. Businesses faced with staffing and growth challenges can count on Crestmark to support their operations and sustainability.

Crestmark can help employers and employees succeed. Call us at 888.999.8050.

Grab-and-Go Accents Illustrate Demand for Easy, Inexpensive Home Goods

When shopping for furniture, bedding, rugs and home decor, modern customers want their items quick and they want them cheap. In general, shoppers aren’t visiting multiple showrooms to make comparisons before custom-ordering a room full of furniture and then waiting months for delivery.

Today’s shoppers pick up occasional pieces and grab-and-go items like accent chairs or mismatched tables that they happen upon at stores like Target or IKEA or HomeGoods. They visit Pinterest and online catalogs but spend less time in stores.

“We certainly have always had the philosophy that you can completely change a room with a new accent piece of furniture,” says Bill Cain, president of Chelsea House, in the magazine, Retailer NOW. “People love a small table they can put in the back of their car and take home without the hassle of deliveries. I only see this trend growing when the millennial generation ages and downsizes.”

In the apparel industry, a focus on “fast fashion” means consumers expect trends to be available in stores faster and they expect to refresh their closets more often. The same is true of the furniture and home goods industry.

“People are engaging with their home spaces or office spaces very similarly to how they engage with their wardrobes. A space is never really done—it becomes a continual reflection of themselves,” says Noa Santos, CEO and co-founder of Homepolish, an on-demand interior design service. “The idea of waiting eight weeks for a couch delivery seems absurd, especially to younger consumers.”

Getting products into homes quickly

This demand for convenience and speed means manufacturers and businesses need to streamline distribution and delivery processes, whether it’s in retail stores or internet sites. Multichannels often work hand-in-hand as consumers may do research online but still like to see items in stores.

Retail e-commerce sales of furniture and home furnishings grew 16.4 percent in 2017 to reach $35.95 billion, and is expected to total $62.36 billion by 2021, according to Home Furnishing Stores and Digital Commerce 2017: Trends and Benchmarks. Overall, furniture and home goods account for about $100 billion of the U.S. retail market.

Getting products into households quickly means home goods producers and distributors have to hurry to keep pace. Small businesses need flexible financing solutions and quick turnaround so they can take advantage of trends in the marketplace before they fade and change.

Quick cash flow for businesses

Crestmark financing specialists understand the small-business needs of this quick-changing marketplace and can help companies get the timely cash they need.

With flexible financing options for furniture makers, textile importers, cooking equipment manufacturers, lighting distributors, and others looking to grow their home furnishings businesses, Crestmark provides access to working capital so business can produce the products that are in demand—while they are still in demand.

If you need fast financing, Crestmark can help. Call us at 888-999-8050.

Looking for Working Capital? We Can Help.

Help with working capitalYou need cash to run your business. At times, you might find yourself a little short on reserves. As you know, things come up. A new employee is hired. A piece of equipment is added. Rent and warehousing bills are due. Business owners sometimes need a temporary boost to sustain these operations.

A financially stable company needs a healthy amount of working capital to maintain operational efficiency. Your assets should outweigh your liabilities, but sometimes that balance shifts. If your cash on hand is low, there are flexible funding options that make the most of your assets, inventory and accounts receivable to free up the cash or credit you need.

Consider asset-based lending if you require an infrequent, but major purchase

If you are faced with a large-scale spend, but it’s not an ongoing expense, you might consider a term loan or revolving line of credit based on your assets as collateral. Asset-based lending (ABL) is affordable with flexible payment plans, and may make your upfront purchase cost less intimidating.

With ABL, your current accounts receivable, inventory and assets can be used as collateral for the loan. You don’t sell your assets; you borrow against them.

ABL is secure, as long as your assets remain stable. It is not tied to profit margins, but the liquidity value of your assets. This style of financing can be more tolerant of business downturns and fluctuations. It appeals to businesses that are unable to obtain traditional bank loans.

Consider factoring if your customers are slow to pay

You have plenty of customers, but they are slow to pay their invoices. In the meantime, you must continue to make payroll and keep business moving along. Factoring allows you to collect on invoices immediately and leave the administrative work to a trusted and reliable expert. It is a form of ABL that provides versatility for business owners.

Factoring is a cash advance on your own money. It is not a loan. There is no monthly payment. Instead, you turn your invoices over to a factor, who gives you a percentage immediately, then collects from the customer, keeps a small fee, and provides the remainder to you. Business owners often find this streamlined process beneficial because it includes administrative assistance for bookkeeping, credit protection and follow-up on receivables.

Consider leasing if you need to re-equip your office

With fast-moving technology, you may need to update your information and data systems. In times of growth, you may need to expand your operations, machinery and tooling. Equipment leasing is a beneficial option if you need the goods now, but you prefer to pay over time.

At the end of the lease, you can return the equipment and start fresh, or consider applying past payments toward the purchase of the equipment you were already using. Experts can help you determine whether a fair market value lease (FMV) or a $1 buyout lease is the better option for your circumstances.

Consider an SBA loan if you need quick approval, low interest and a low down payment

Loans issued through the U.S. Small Business Administration (SBA) have simple and flexible terms. Plus, they can be used for many business purposes: to purchase or refinance buildings, for startup or expansion, for long-term fixed assets, remodeling, equipment costs, or to access operating capital.  

Government guaranteed SBA loans have low rates and fees and can usually be approved by a preferred lender within five days. They can be more flexible than traditional bank loans, are a good consideration for businesses with less-than-perfect credit, and don’t always require collateral. Some lenders start at $500 and lending may extend as high as $10 million in some cases.

Crestmark supports business owners

While you provide great service to your clients, let Crestmark provide great financing services to you. As a nontraditional direct lender, Crestmark specializes in working capital solutions for small- to medium-sized businesses.

Offering all of the choices mentioned above, Crestmark professionals can help find the best option to suit your situation.

Call us at 1-888-999-8050 to learn more.


Trucking Companies Build Agile Delivery Systems in the Age of Uber

Thanks to Amazon Prime and other door-to-door delivery services, the consumer’s general expectation is that orders should move ultra-quickly. The transportation and shipping industry is making necessary adjustments. In many ways, they are adjustments of scale. That is, trucking companies that are best equipped to deal with urgency may be the little ones—those with just a handful of local trucks that can be more nimble, flexible and immediately responsive to customer demands.

If size matters, then bigger may not always be better—especially when dealing with traditional freight transportation models that can get bogged down with brokerage services and third-party logistics. In contrast, Uber Freight, which launched in May 2017, simplifies things by matching smaller trucking companies with loads that need hauling. Much like the popular Uber car-ride app, this trucking app helps drivers find freight instead of passengers. Currently operating mostly in and out of Texas, Uber Freight is driving new discussions among truckers and shippers who consider flexibility as a dominant factor for success. Drivers who are geographically close to pending shipments can quickly consider whether or not to take each job. Smaller trucks with multi-stop routing and fewer traditional dock deliveries comprise an environment that may be suitable to smaller businesses with smaller fleets.

Uber Freight boosts small trucking companies

“Uber Freight is the Uber for trucking. It provides one-touch booking for drivers, which is new to the industry,” Uber Freight Director Bill Driegert told Transport Topics. The goal, Dreigert said, is to “make the lives of truck drivers better” by making it easier to find good freight, by simplifying transactions and providing upfront pricing and quick payment for their work. Simply put, it eliminates the middle man.

The Uber Freight model brings good news to small trucking companies who sometimes have difficulty breaking into longstanding contracts to find hauling loads. They often have an even harder time attracting financing from traditional banks in an environment of driver shortages and complicated federal highway infrastructure and legislation.

In the summer 2017 issue of Truckload Authority, Rob Penner, chairman of the Truckload Carriers Association and president and CEO of Bison Transport, said of previously slow economic growth in the trucking industry, “… There are many private companies on the block and when you delve into their businesses, you can see that they are not performing well. Investment in those businesses has not kept pace and typically it is because they are undercapitalized. In my opinion, shippers do have reason for concern. Some segments of the industry, like flats and refrigerated, are starting to get busier now and we expect it to continue to ratchet up, especially with the ELD [electronic logging devices] mandate on the near horizon. There are better times ahead for most well-run organizations.”

With proper support, transportation companies are poised to provide agile, responsive, and smaller capacity shipments at a faster pace to get items from here to there—quickly.

Crestmark keeps trucking companies on the road

Crestmark specializes in financing for small- and medium-sized trucking companies across the country by providing them with working capital to keep vehicles and drivers on the road.

Crestmark sees tremendous growth potential in the transportation industry, which is largely based on small-business models that can remain adaptable as they grow their fleets and add drivers to meet new demands.

With a thorough understanding of the ever-changing transportation industry, Crestmark excels in small-business lending, small-scale transactions, and small-business growth. Offering specialized services including same-day funding, fuel advance options, and industry expertise, Crestmark knows trucking.

Call us at 888-999-8050.

Equipment Loan vs. Equipment Lease: What Makes Sense?

Getting the tools you need for business should not leave you cash-strapped.

Equipment financing can equip your business for success by keeping working capital in your hands. Paying cash for a piece of machinery requires paying in full before the machinery is productive and able to contribute to your revenue. Whether you choose to finance equipment with a loan, rent equipment with a lease, or create a custom financing option, there are plenty of ways to avoid a large cash outlay.

Equipment financing allows you to set up customized payment plans, maintain and manage cash flow, and acquire the materials you need to do business. According to the Equipment Leasing and Finance Association, nearly 8 in 10 businesses finance equipment, instead of paying one lump sum upfront. This includes loans, leases and lines of credit. Nationally, $1.02 trillion of the $1.5 trillion spent on equipment and software was financed, instead of purchased outright.

Financing is used by businesses across all industries and service sectors, but the top-five most financed equipment types are: transportation (26 percent of all financed equipment), IT and tech services (23 percent), agricultural (10 percent), construction (9 percent), and office machines (6 percent).

Loan or lease?

Depending on your needs, you might consider an equipment loan or an equipment lease.

Businesses of all sizes—from Fortune 500 companies to mom-and-pop shops—can benefit from these arrangements.

Both loans and leases allow you to purchase equipment immediately, enabling you to generate revenue— while you begin making small, periodic payments.

In general, a loan is better if you have excess money for a down payment and you plan to keep the equipment for a long time. A lease is usually better if you don’t have money to put down, the equipment is only needed for a particular project, or if there is a risk of it becoming outdated.

Here are some items to consider.

Equipment LOAN

(line of credit)

Equipment LEASING

Good for: equipment you want to own immediately and permanently; items that are central to your core business and in constant use in order to generate revenue; inventory purchases, business improvements, capital expenditures Good for: equipment you need to use, but have the option to purchase; items/technology that may become obsolete; project-specific equipment that you don’t need long-term; equipment you expect to use for 36 months or less
Payment: Bank provides a loan and borrower makes payments with interest. Usually requires a down payment. You own the equipment at the end. Payment: Allows 100 percent financing with no down payment. Monthly payments customized to your needs. The lease finances the equipment’s value, which decreases over time.

·         Lending is based on fixed business assets used as collateral.

·         Immediate tax deduction

·         Enables expense planning

·         Generous credit approval, since assets are used as collateral

·         Simpler to obtain than a traditional bank loan


·         The leased equipment serves as the collateral.

·         Related services can be bundled: maintenance, service, installation, etc.

·         Lender can become administrator of equipment management, delivery, maintenance and disposal.

·         For growth companies, multiple lease contracts can fall under a master lease.


Typical industry uses: inventory purchase, business expansion, heavy machinery, power equipment Typical industry uses: machinery, IT hardware and software and services, healthcare technology, medical equipment, security systems


Call Crestmark for a flexible financing solution. 888-999-8050.

Fair market value (FMV) lease vs. $1 buyout

Equipment costs money, and businesses need essential equipment. Leasing options allow you to spread payments over time and keep your cash in hand. According to the Equipment Leasing and Finance Association, nearly 8 in 10 businesses finance equipment, utilizing loans, leases and lines of credit.

Equipment loans and lines of credit are an option for some, but they usually require a down payment. In contrast, leasing arrangements avoid a large cash output and instead schedule customized periodic payments. Leasing is often preferred over a loan if costs include ancillary services such as delivery, transportation, installation, testing, or other “soft” expenses that can be rolled into the monthly lease payment.

Equipment leasing serves companies of all sizes across a wide range of industries.

What can I lease? And how?

You can lease just about everything. There are few limits.

The range of assets and equipment that qualify for leasing is vast: from giant, industrial manufacturing machinery, to daily usage items like cleaning equipment, to bulk purchases like multiple laptops, vehicles, furniture, phones or technology.

Although business owners require certain items to operate, they are wise to be creative with their financing. Maintaining working capital without large cash outlays is the most obvious advantage of equipment leasing.

Two major lease options are the fair market value (FMV) lease and the $1 buyout lease. Both are useful. Both allow business owners to avoid a large lump-sum expenditure. Both have specific benefits, based on your needs.

Here are the distinctions.

Fair Market Value Lease (FMV)

$1 Buyout Lease

Lease to use

An operating lease to use equipment; Also called a “true lease”

Lease to own

A capital lease to own equipment; Is essentially a loan

Good for: long-life equipment that maintains high residual value like aircraft, manufacturing tools, construction machinery


Also good for: short-term, seasonal or project-based equipment that you don’t want to keep, or equipment that may become obsolete

Good for: equipment you intend to keep and own; items that retain value like construction equipment, automotive repair, material handling


Also good for: high-cost equipment that is financed over time, in contrast to a large down payment

Payment: You don’t pay the full cost of the equipment over the term of the lease. Upon expiration, you can opt to return the equipment or purchase it at a fair market rate. There is no obligation of ownership. Terms range from 12-60 months with fixed monthly payments that are generally lower than $1 buyout payments. Payment: Flexible payments are based on the residual value of the equipment and your intention to purchase at the end of the term. It works as a loan and ownership is transferred.

·         You won’t get stuck with obsolete equipment

·         Outsourced, hassle-free asset management, delivery, repairs, service, and disposal

·         Scalable terms according to growth, so the type and amount of equipment can fluctuate

·         Can deduct monthly lease payments as business expense

·         Maximum flexibility


·         You have ownership of the equipment

·         100 percent financing with no down payment

·         Appears on balance sheet as company asset; entire amount can be deducted as business expense the first year of purchase

·         Cost of equipment is $1 at end of term

Typical industry uses: technology that gets outdated quickly, startup venture with uncertain future needs, renewable energy systems, computer hardware and software, tooling, transportation fleets, etc. Typical industry uses: central technology systems, construction, machinery, tooling, cleaning equipment, pressure washers, commercial vehicles, equipment manufacturers and dealers who want customers to have their products, etc.

Call Crestmark for a customized equipment leasing solution. We help. 888-999-8050.

Asset-Based Lending vs. Factoring: What’s the Difference?

Red American long haul big rig

Small-business owners with non-traditional working conditions may also require non-traditional financing.

Standard bank loans suffice for well-established companies with well-established revenues; but not all companies operate in a stable market. Consider someone in the staffing or apparel business who has cyclical periods based on the season; or a startup company with secured clients, but without years’ worth of revenue data; or a machine shop that can’t afford to wait 60-90 days for its vendors to pay, but needs to purchase materials to keep orders running. These situations may be unattractive in terms of traditional loan criteria, but there are other financing options available.

Asset-based lending and factoring both use accounts receivable as the primary source of collateral. Both provide working capital during cash flow crunches, but in different ways. Here are the distinctions.

Asset-based lending (ABL)

ABL can provide a term loan or a revolving line of credit that a business owner can access as needed. The credit limit is based on the company’s assets, which are used as collateral for the loan. Assets can include inventory, accounts receivable, machinery and equipment. You don’t sell your assets, but you borrow against them.

The benefit of ABL is that the loan is based on liquidity value. Even during temporary downturns and fluctuations, the collateral value remains stable, guaranteeing the loan availability.

ABL is a great option for a business that has plenty of inventory and accounts receivable, but needs access to cash.

Factoring (also called accounts receivable financing)

If your business is likely to gain or lose capital in waves, then factoring may be a good option to lend stability. It is one type of asset-based lending.

Factoring is a cash advance on your own money. It is not a loan. There is no monthly payment.

Working with a direct lender frees you up from the collection process and allows the factor to take over management of your business’s unpaid invoices/receivables. When your company issues an invoice, the factor immediately pays up to 90 percent of it as an advance. Behind the scenes, the factor collects the full amount, and the issuing company gets the remaining portion, minus a service fee (typically ranging from 1-3 percent of the invoice).

Although factoring involves selling your invoices to a third party, you do not give up equity in your company. You remain in control of your business.

Factoring is based on the quality of your customer’s credit, not your own. Your borrowing amount can scale up or down depending on your invoices.

Recourse and non-recourse funding options are available. They differ in who is accountable in the case of nonpayment. In recourse factoring, you are responsible if your client fails to pay the invoice. In non-recourse factoring, you are not responsible, the factoring institution is, but there is an added fee.

Benefits of both

Asset-based lending and factoring both provide quick access to cash and neither is burdensome for the borrower. Support from a direct lender can provide peace of mind so business owners are able to focus on core operations and services.

These finance solutions serve companies of any size across a wide range of industries.

Asset-based lending

(term loan or revolving line of credit)


(a cash advance, not a loan)

Good for: rapid growth support, shareholder buyouts, mergers and acquisitions, expansion Good for: companies with slow-paying customers or unusual/unexpected cash outlay, increasing inventory, taking advantage of trade discounts
Typical uses: replacing or purchasing new equipment; alternative capital for companies exiting a traditional lending relationship Typical uses: providing basic working capital to industries that produce items for slow-to-pay retail stores; increased payroll support and cash on hand, especially during busy seasons

·         Based on total asset value, not minimum monthly profit margins

·         Does not require projected earnings forecasts

·         Flexible, seasonal over-advances may be possible

·         Frequent advances, including weekly or daily as needed


·         No debt accumulation; does not require monthly pay-down terms

·         Does not require projected earnings forecasts

·         Scalable and flexible

·         Borrowing on sales is immediate

·         Frequent advances, including weekly or daily as needed

·         Administrative support provided

Requires: an assessment/verification or field exam of collateral value Requires: orders/outgoing invoices/accounts receivables; notification to customers that invoices are being managed by a third party
Typical industry use: Small, midsize or large companies. Popular for manufacturing, retail, wholesalers, distributors, service industries. Typical industry use: Small, midsize or large companies. Popular for trucking, freight transportation, manufacturing, apparel and footwear, textiles, oilfield services, staffing agencies.

Call Crestmark for a flexible financing solution. We help. 888-999-8050.

Pros and cons of CDs

Is a CD right for you? Who benefits most?

Pros and cons of CDs

A person investing $25,000 or more in a certificate of deposit (CD) is less interested in razzle dazzle — and more interested in a promised guarantee. Boring can be beneficial.

When you put money into a CD account, your job is simple: wait. Don’t watch the market. Don’t gamble on what might happen. Just wait. You know how much you will make, and you know exactly when to collect your reward.

A CD is a timed deposit with a guaranteed rate of return. That means you agree to invest your money for a certain period of time, known as a “term,” which generally ranges from one month to five years. During this time, you can’t access your money without potential penalty fees; but when the term expires, you know precisely how much you will earn.

Crestmark consistently offers some of the best CD rates in the country. As an example, let’s say you invest $25,000 for one year with a 1.8 percent rate. You simply leave your money alone. Then, upon maturation, you get your initial investment, plus an extra $450 just for waiting. If you change your term to two years at 1.9 percent; you get an extra $475. And if you choose a five-year term at 2.15 percent, you earn $537.50. In these examples, the investor does nothing, except wait for the CD to mature and collect the earnings. There is no risk and no hassle; just guaranteed income.

Rates depend on the size of the initial investment (usually $25,000 to $250,000) and the length of the term (generally one month to five years). Amounts larger than $250,000 can be accepted, but the FDIC only insures up to that amount. Annual percentage yield (APY) rates fluctuate and vary among lending institutions, but non-traditional, federally insured banks like Crestmark tend to offer significantly higher rates than big-name banks, due to reduced overhead.

Also, CDs generally offer better interest rates than savings accounts, but the trade-off is not having immediate access to your money. If you already planned to keep your cash sitting in the bank, with no transactions necessary, a CD may be a favorable option.

Who benefits most from CDs?

  • A business on the verge of expansion – Perhaps you are a business owner in the enviable position of having accumulated some excess money. Maybe you plan to acquire another company in a few years when that owner retires. You need to use the sum you’ve collected, but not for at least 36 months. Why not earn while you wait? With a 2 percent rate, $100,000 would turn into $102,000 in three years. That’s like getting free office furniture and a computer.
  • A person stockpiling for a down payment – Maybe you plan to build a house in a few years and you are saving for a down payment before construction begins. In addition to budgeting diligently, you could earn an added bonus. With a 2 percent rate, $50,000 would turn into $51,000 when the CD matures. That may be enough to fund a kitchen counter or appliance upgrade. The little things add up.
  • Retirees-to-be – If you plan to retire in five years or less, your budget may not allow you to risk losing any part of your hard-earned savings—especially if you are depending on the interest on that money. A CD allows those preparing for retirement to earn with stability, and to be assured of a risk-free, guaranteed outcome. It may not be ideal for someone retiring in 20 years, however, since inflation may outpace CD rates, long-term.
  • The inert investor – Maybe you are an infrequent stock market watcher and have no interest in playing the field. You aren’t willing to take risks, so you prefer a guaranteed return on your investment with little or no personal involvement. A CD may be a good option.
  • A business requiring stability – Many businesses who depend heavily on certainty have invested in CDs. For example, community credit unions need to guarantee the security of their own clients’ transactions, so they might consider CDs to grow their overall investments under the most secure conditions. Crestmark specializes in these business-to-business transactions that support mutual growth.
  • Those waiting for rates to rise – If interest rates are consistently low for a while, it is common to hope for the promise of something better for your investment just around the corner. In this case, putting money in a short-term CD may allow you to hold that money securely for a brief time, then re-think the investment if rates begin to rise.


Some situations are not a great match for CD investments. In general, CDs are not the best option for those who need regular access to their money or for those who can weather the highs and lows of the stock market over time.

  • Penalties for early withdrawal – If you adhere to the terms of your CD, there’s no problem. If you need to terminate the agreement early, you will be charged a penalty, which may negate the interest earnings. Choose your term carefully to anticipate your liquidity needs.
  • Locked interest rate – The interest rate locks in for the term of the CD. Even with confounding market fluctuations, the CD rates are not variable until the time of withdrawal or rollover. Stability and low-risk are the selling points of CDs, making potentially advantageous variability unavailable, depending on the financial climate.

Laddering is a way to take partial advantage of variable rates, especially if the rates are low at initiation. If you choose a CD ladder, you divide your investment among several smaller CDs at higher rates that mature at staggered dates. This strategy offers maximum growth and a bit more liquidity; in other words, your funds become available a little faster.

For instance, you may open one CD that matures in a year, a second CD that matures in two years, and a third CD that matures in three years. When the first CD matures, you roll that money into a new three-year CD. You do the same thing when the second CD matures. Ultimately, you end up with a three-year CD maturing every year for three years. You can also set up a five-year ladder to maximize earnings and build in some flexibility.

  • Taxability – Unlike treasury notes (T-notes), the interest on CDs is not exempt from local and state taxes. Interest is taxed as regular income and not at the more favorable capital gains rate.
  • Long-term inflation considerations – While it’s true that CD earnings are predictable, inflation rates are not. If you are investing early in life and do not need direct control of or access to your money for a significant period of time, most experts say it is generally advisable to invest in securities like stocks, bonds or mutual funds—which sacrifice short-term volatility for long-term gains. It is possible that inflation could outpace CD returns over decades.

The guarantee is guaranteed

In the investment world, promises are uncommon. CDs, however, are 100 percent guaranteed and FDIC-insured up to $250,000—the maximum allowed by law.

Investing in a CD through a reputable institution like Crestmark provides impenetrable security for your money.

There are few certainties in finances, and CDs are about as reliable as it gets.

Visit our CD page to see Crestmark’s current CD rates.

Or call us at 855-267-6445.

E-commerce is King

Reinventing retail shopping markets for apparel and footwear sales

As shopping malls and traditional brick-and-mortar stores devolve, retailers are reinventing themselves.

Mass store closures have a significant downstream effect on other businesses related to fashion, apparel, footwear, distribution, manufacturing, wholesalers and secondary industries. If they haven’t already adapted to online marketplaces, businesses are scrambling to diversify to online sales, omnichannels and e-commerce in order to survive and grow.

In the first three months of 2017, U.S. retailers announced 2,880 store closings. That suggests record-breaking retail downsizing, with analysts predicting more than 8,600 closures by year’s end.

“It’s reminiscent of the real-estate collapse, if you will,” said Rick Helfenbein, president and CEO of the American Apparel & Footwear Association. “We bought too much space, and we don’t need it and we’re paring down.”

Location and traffic

With less foot traffic in stores, there is more e-commerce traffic on websites and mobile platforms. The Great American Group reports: Contrary to brick-and-mortar sales, e-commerce sales continue to grow. During the fourth quarter of 2016, e-commerce sales represented 12 percent of total retail sales, excluding automobiles and gasoline, reaching $102.8 billion, according to the U.S. Commerce Department.

In her state of the industry presentation earlier this year California Fashion Association Executive Director Ilse Metchek discussed the range of distribution channels available to apparel manufacturers, including: department stores, e-commerce, mobile commerce, TV, pop-up shops, catalogs, big-box stores and specialty retailers. “We are the only country in the world that has this amount of distribution channels,” she said. Online apparel sales, currently at 8.5 percent, are on the rise and on track to grow to $86 million this year. By 2025, 30 percent of total retail will be online, Metchek said.

Although the locations of the retail sector are shifting, actual retail sales figures have been on a positive trajectory, with total holiday sales for 2016 up 4 percent, according to the National Retail Federation (NRF). Going forward, the NRF projects 2017 retail sales to increase between 3.7 percent and 4.2 percent over 2016.  The e-commerce and off-price sectors are expected to continue to perform well in 2017; however, department stores and specialty apparel retailers could face further store closures as businesses right-size.

Success shifts to multiple-channel touchpoints

During the 2017 holiday season, 85 percent of shoppers between the ages of 30 to 44 are expected to shop online.

Most experts agree that the shopping dynamic is changing from a mall-based experience to a smartphone point-and-click experience. Offering touchpoints across multiple channels seems to be the primary goal and indicator of success.

A business selling women’s apparel, for example, might want to consider diverse opportunities: an online catalog, search engine ad, retail store, online customer service rep, testimonials, ratings and reviews, promotions, website, and follow-up marketing emails.

A 2015 McKinsey Quarterly report found that companies with greater digital capabilities were able to convert sales at a rate 2.5 times greater than companies with fewer digital touch points.

In 2016, online sales were expected to capture 11.6 percent —or $394 billion—of all U.S. retail sales, but “digital touch points” commanded an estimated 49 percent of U.S. sales. This is according to a report by National Retail Federation’s (NRF) division and Forrester research firm.

The report also found that retailers are focusing their efforts and investment on ways to enhance customer experiences online. More than half of the retailers surveyed—54 percent—listed mobile commerce among their top three initiatives in 2017. Additionally, they said m-commerce sales—or sales using a mobile device—increased 65 percent over last year. Nearly half (47 percent) of online traffic came from smartphones and 30 percent of online sales were made using a smartphone.

“Smartphones are driving retail sales more than ever, and retailers have found that even modest investments in mobile initiatives can result in huge returns,” said Artemis Berry, NRF vice president for digital retail. More touchpoints equate to more customer connections.

Crestmark adapts financing needs for apparel and footwear businesses

Crestmark provides financing support for wholesalers, importers and distributors in various apparel, accessories, and footwear businesses across the country. With an eye on the changing retail space, Crestmark financing experts are helping small- and medium-sized businesses remain versatile and competitive.

Apparel and footwear clients often rely on factoring to support their operations, which may experience cash-flow crunches due to seasonal or unforeseen market shifts. This funding flexibility allows them to treat their invoices as collateral and receive cash advances on each invoice.

The up-and-down nature of fashion is understandable, and Crestmark can guide businesses through both sluggish and prosperous seasons with versatile and responsive financing.

Crestmark can help. Call us at 888.999.8050.