Economic Impact Abounds As NCAA Narrows to Final Four

by Crestmark 2. April 2014 09:42

March may be over, but the madness is in full swing as the NCAA tournament comes down to the Final Four. With barely a week to go in this annual fascination with college basketball, companies large and small are feeling the financial effects – some good, some not so much. Whether they're plagued by employees losing productivity or bolstered by a sudden influx of tournament-hungry patrons, the impact is undeniable. 

march madness

A Blow to Productivity

According to a recent report from outplacement and career transitioning company Challenger, Gray and Christmas, more than 50 million American workers are participating in office pools. While the annual practice may have cost companies approximately $1.2 billion in lost production time in the first week of the basketball tournament alone, the firm has cautioned corporate executives to avoid taking a hard line against bracket pools, friendly discussions at the water cooler and those taking time out for updates. A blow to employee morale and loss of camaraderie could be even more costly to a company's bottom line in the long run.

A Rise in Morale  

While the setback to productivity has declined as the basketball games have transitioned to evening and weekend play, the excitement of bracket busters and newly formed kinships at the office continues. Companies that allow employees to wear their favorite teams' colors or check office pool updates on the clock can still reap the benefits of enthusiastic workers. A pre-tournament survey by staffing services firm OfficeTeam found that 32 percent of the 300 senior managers surveyed believed that support of March Madness activities had a positive impact on worker morale, compared to just 20 percent in 2013.

A Boon to Business

On the other side of the financial fence, many merchants have seen a rise in business during the NCAA tournament. Hotels, restaurants and shops in host cities have experienced a surge in bookings, as have providers for air and ground  transportation. Mid-West bracket host city Indianapolis, for example, expected a $20 million spending impact from this past weekend's showdowns between the University of Kentucky and University of Louisville, as well as the University of Tennessee and University of Michigan. Kentucky eked out a win against Michigan amid an economic boost for Indianapolis merchants.

Meanwhile, restaurants and sports bars throughout the country offering televised games with food and drink specials are drawing record crowds of their own. In some cases, employees for these businesses are picking up extra shifts and working longer hours to meet the demand.  

With the semi-final games set for Friday, April 4 and the championship on Sunday, April 6, 2014, the eyes of millions of Americans are on the Florida Gators, Connecticut Huskies, Wisconsin Badgers and the Kentucky Wildcats. While there's no doubt that the economic impact of the NCAA tournament has created both winners and losers, only three games remain until it's back to business as usual.  

 

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Small Business Borrowing on the Rise at the End of 2013

by Crestmark 28. January 2014 08:25

The borrowing for U.S. small businesses increased near the end of 2013, which has analysts optimistic about the economic outlook for 2014.

This increase, reported by the Thomson Reuters/PayNet Small Business Lending Index, measures the volume of finance lent to small companies. At 120.4 in October and 111.4 in November, this level is the highest since August 2007—right before the financial crisis set in. Additionally, November, which only had 20 working days, saw the highest per-day borrowing rate out of the entire year.

This kind of increase points to an optimistic U.S. economy. Normally, a high level of small business borrowing is correlated with overall economic growth because small companies produce more goods and increase assets, ultimately resulting in more money infused into the economy as well as the creation of more jobs.

"It's another sign of continued expansion," PayNet founder Bill Phelan said, according to Reuters. Small businesses "are seeing more demand for goods and services, and that's all good for GDP."

Fewer Delinquencies

With lighter financial burdens, small businesses have been able to not only borrow more, but also pay back those loans in a timely manner.

The percent of small business loans unpaid at 31 days past due and 180 days past due was down to 1.43 percent, which according to Reuters, is a new record low. For a little perspective, the number of delinquent loans reached a high of 4.73 percent in August 2009 and has steadily declined since then.

Looking to the New Year

Because PayNet's lending index has typically correlated in the past to more overall economic growth for the next one to two quarters, analysts believe the US economy should continue to improve in 2014. Some factors in improving the outlook will be actual financial infusion—such as more business production—but the attitude of the American consumer will also play a key role. 

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Staffing for the Online Era

by Crestmark 23. January 2014 06:55

Staffing a business used to be a fairly straight forward process: a manager would receive a résumé, conduct an interview, and decide whether or not the candidate fit with the company. But as technology has advanced, the internet has begun to play a larger and larger role. 

From places like Elance to SITE, online staffing sites have hundreds of thousands of job postings with hundreds of millions in revenue, covering all industries, skillsets, and experience levels. So, what does this mean for the industry as a whole?  

It means that things are changing for the better, and there are benefits for both job seekers and employers.

Benefits for Job Seekers:

Job seekers can find a multitude of opportunities: from a project that may involve one or two assignments for supplemental income, to ongoing and long-term contract opportunities. And with the ability to search based on keywords related to their qualifications, job seekers can drastically cut down the time it takes to find relevant positions to apply to.

This changes the game dramatically. Rather than relying on a recruiter, job seekers have the power to take their search into their own hands.

Benefits for Employers:

For the employer, utilizing online tools allows them to automate many of the processes that previously needed to be completed manually. In other words, employers can use new tools to save money .

While taking the industry online doesn’t eliminate the need for recruiters, it does reduce both the effort needed to recruit and the money spent on recruiting. According to Forbes, recent data found that businesses around the world spend more than 3,300 per hire on recruiting alone, which is actually up six percent from previous years. This equates to the U.S. spending 72 billion on recruiting services per year, with the international numbers nearly three times that.

As the staffing industry continues to shift online, the need for companies to invest in technology will continue to rise. That’s where Crestmark can help. If you have a staffing company and are in need of capital to grow your business, give us a call today!   

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Winning Over Lenders by Being Prepared: What You Need as a Small Business Owner

by Crestmark 25. October 2013 04:11

Getting a small business loan can be a challenging task when presenting a valid case for lending. So what information and paperwork are you going to need when applying  to a lender in hopes that they will not only set you up with a loan, but will also get you a favorable one?

First, be confident in your loan request. Know the amount you will need to fund your growth, be prepared to discuss what opportunities and income will come from this loan, and go in prepared with statements and research to explain the costs of everything from raw materials of new product to marketing expenses. Be as detailed as possible

Whether you’re applying to a traditional or alternative lender, the following materials should be prepared ahead of time:

  • • Proof of a good income record
  • • Any necessary loan applications
  • • Personal Background and Financial Statement
    • • Statement of Personal History
    • • Personal Financial Statement
  • • Business Financial Statements (for the last two fiscal years)
    • • Profit and Loss Statement
      • • Current within 90 days of your application.
  • • Projected Financial Statements
    • • Projected income and finances for the next year with an explanation of how you will attain that goal.
  • • Ownership and Affiliations
  • • Business Certificate/Licenses
  • • Loan Application History
  • • Income Tax Returns (for the last two years of filings)
  • • Business Overview and History
    • • Bring a brief statement highlighting the history of your business and its successes and/or challenges.
    • • Explain in this why you need a loan to continue its success.

When meeting with an alternative lender, you will need to prepare a few additional documents beyond those listed above. An alternative lender like Crestmark can offer more flexible funding options, and has the ability to work with businesses that would not otherwise qualify for traditional bank financing. If you’re looking to win over an alternative lender, they may be interested in also seeing the following:

  • • Accounts Receivable Aging/Detailed (current month-end)
  • • Customer Contact List, including city and state
  • • Accounts Payable Summary (current month-end)
  • • Invoices and Supplementary Back-Up
  • • Purchase Orders/Contracts
  • • Detailed Inventory Report, showing raw and finished goods, as well as work in process
  • • Marketing brochures, informative business overview

Keep in mind that while this is a list of commonly-required documents, it’s important to check with each lender before meeting with them. Also, documentation is a good start, but it’s really only half of it. You’ll also need to be prepared to sell your business and yourself as its leader. Prove that you’ll be a valuable and trustworthy investment by showing a plan to pay back the loan, strong credit statements showing you have creditworthiness and several reasons why you believe your business has a solid chance at success with this funding. 

Are you in the process of looking for a lender? We want to help, and have professionals ready to discuss your business capital needs.

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Four Ways to Know if a Business Line of Credit is Right for You

by Crestmark 11. September 2013 11:05

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Starting a new business is not the only time an entrepreneur may look for help with financing. Some small business owners—especially those who operate seasonally—experience fluctuations in cash flow throughout the year. A line of credit can help to smooth over the ebb and flow of sales and cash flow throughout the year. 

A business line of credit provides on-demand funding, and there are a number of different types of lines of credit ranging from unsecured, meaning that it is not backed by any kind of assets; to secured, backed on a general basis by all assets of the company, or by specific assets that are structured into the funding formula of the line of credit.

Here are four questions to ask yourself before approaching a lender:

1.) Does your business have uneven cash flow? The best use of a business line of credit is for paying off expenses in the short term that can be easily paid off in the long term. This works well for short term expenses such as payroll and inventory.

2.) Are you able to pay off the balance of your credit line? It can be tempting to carry a balance on a line of credit, but this will ultimately damage both your relationship with the lending bank and your company's financial health. Unless you are able to pay off the balance quickly, you should not run the risk of borrowing against a line of credit, but possibly consider a term loan for long term items like buying equipment.

3.) Would a business credit card be more appropriate for your needs? A line of credit will have a lower interest rate and higher credit limit than most business credit cards. It will not, however, provide line by line tracking of expenses along with date and location of purchases. This can be very valuable for record keeping and future planning, and also allows you the flexibility to provide individual cards to key employees/staff for travel or other day to day business expenses.

4.) Are all business owners available to apply? If your business is a partnership or has multiple owners, at least 80% of the owners must be represented in the credit application. This makes applying for a line of credit a decision that must be made across all owners of your business.

If you are just starting out, looking to obtain working capital for your existing business, or want to grow from your established base, Crestmark’s business development team can work with you to determine which type of financing solution is the best fit for your current business situation.

 

 

 

 

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