Using Stock Options to Build Your Team

As the economy continues to strengthen in 2015, demand for skilled employees continues to grow as well. Companies who are looking to hire top talent have to find creative ways to land (and retain) workers. This is especially true for young companies who are competing against larger, more established businesses who have deeper pockets to attract new hires.

Offering stock options can be a great way to build your employee base. Bill Harris, the founder of Personal Capital, said at a South by Southwest Interactive session in 2013 that stock options are the most powerful way to help build a successful business.

“The people you want to attract to your business are the people who want equity,” he says, according to Forbes. “You need people who are willing to take risks. And then you need to reward them.” For that, Harris says stock options are the “best little storehouse in Texas.”

“It’s great for the company since it’s got no cash outlay,” he explains. “For the employee, it’s even better. They benefit from the stock price rising and are protected from its dips.”

Harris says first-timers often struggle with equity because they don’t understand how to get the maximum value out of it. He suggests a one-year waiting period for new employees after which the stock options can vest monthly or annually. There are no hard and fast rules on who gets how many options, but he suggests executives or early hires can receive as much as 1-2% of the total shares of the company.

Harris also notes stock options can provide a benefit that no future investor could ever receive. “In startups, employees are often able to purchase exercisable shares by as big a discount of as much as 10 to 1,” he says. “In other words, if the preferred stock is a dollar, the common share and employee could be 10 cents.” When those shares start to gain value, the profits could be huge.

When done correctly, equity offerings can help spur employees to bet on an unproven or new company, reward long-term value creation, spur creative thinking by employees, and encourage employees to think about the company’s success beyond their own positions.

Andy Rachleff designed the Wealthfront Equity Plan to help companies figure out how to offer equity. Each year, he says, the company creates a pool that addresses four needs: New Hires (used to hire new employees at market levels), Promotion (used to reward employees that have been promoted), Outstanding Performance (used to reward the top 10% to 20% of employees who were exemplary in the past year), and Evergreen (used for all employees, starts at an employees 2½-year anniversary and continues every year thereafter).

The key, he says, is consistent, early evergreen grants. These grants, he says, are the most common area where tech startups fail to invest until it is far too late in their development.

“The average tenure for most technology employees is two to three years, and waiting until your first employees hit year four is just too late,” he says.

A transparent and consistent system of evergreen grants allows employees to build that system into their long-term expectations and links long-term tenure and contribution to their ownership stake.

Ultimately, finding a compensation package that allows you to attract and retain top talent is key in growing your business. Next time you are planning to hire, consider stock options as a part of your offer!

Crestmark Funding Solution Featured in ABF Journal

Steve Tomasello, Executive Vice President and East Division President at Crestmark, has written an article recently featured on ABF Journal. Steve has over 25 years of commercial finance experience and has been working at Crestmark since 2009. As an alternative lender Crestmark is often asked by traditional lenders, turnaround professionals and consultants to develop specialized funding solutions for businesses. We are always eager to share our insights and experience with other industry professionals and businesses.

In the article Steve shares Crestmark’s unique experience in finding a new financing solution for a busy thermoforming company. The challenging opportunity to develop a customized loan structure required innovative solutions and carefully timed, coordinated efforts by an experienced lending team. Twelve loans had to be refinanced, consisting of personal loans, mortgages, a line of credit and machinery and equipment term loans.

In the end the multi-tiered solution was made possible by strong leadership within the company, the resourceful and motivated sales, underwriting and management team at Crestmark, as well as a solid relationship with the incumbent lender. A new lending relationship was formed and innovations including improved management of controls, consistent processes, and higher-quality financial reporting to enhance the company’s overall productivity and potential were also achieved in the process.

For full details, read the article here:

At Crestmark we have a broad experience in providing diverse financial solutions to growing businesses. Give us a call today to speak with a lending expert and explore options for your business.

Crestmark Equipment Finance Selects Ivory Consulting Corporation’s Equipment Finance Pricing Software

(WALNUT CREEK, CA – July 14, 2015) – Crestmark Equipment Finance has selected Ivory Consulting Corporation’s SuperTRUMP, its proven software solution for accurate modeling and pricing of equipment leases and loans, to enhance its commercial financing capabilities for customer and vendor programs.

The investment with SuperTRUMP reinforces Crestmark Equipment Finance’s ongoing commitment to third-party vendors and direct end-user commercial customers by providing a recognized equipment financing model. The flexibility of SuperTRUMP allows the application to collaborate directly with Crestmark Equipment Finance’s systems to deliver a complete customer experience.

“With the addition of SuperTRUMP, the number of innovative financial programs Crestmark Equipment Finance offers can increase significantly – and we are pleased to support this exciting new level of growth,” said Scott Thacker, Ivory’s chief executive officer.

Crestmark Equipment Finance’s assetCONNECT®, one of the premier and most comprehensive asset management software platforms in the industry, provides dynamic search and robust reporting capabilities to commercial leasing customers through a secure web portal.

“By joining forces with Ivory Consulting, Crestmark Equipment Finance will now provide customers with a more efficient, competitive pricing model for equipment asset financing,” said Rick Pierman, vice president, asset management for Crestmark Equipment Finance. “SuperTRUMP’s capabilities combined with our other proprietary platforms and technology will continue to deliver competitive lease financing solutions to our customers.”

The Five Cs of Credit

When the time comes to meet with a bank to consider whether or not you are eligible for a loan, there are five key factors that the bank will take into account in the process. These key factors are known as the 5 Cs of Credit and include Capital, Condition, Capacity, Collateral, and Character.  Each of these factors is evaluated by your lender and ultimately will determine whether or not you’re on the way to receiving your loan.

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When you meet with your lender, they will want to know that you are invested in the company both personally and financially. They will consider whether or not you have contributed any funds to the business, as well as, how personally invested you are in the business. Recognize that there is more to a loan than just showing you’re passionate about a project in order to get the loan.


This factor takes into consideration the level of risk your company has in the market. What are the local economic conditions that can affect the success of your business? In addition, they will factor in your relationships with vendors and customers, your competitive advantage and the overall industry landscape.


This shows whether your business will have sufficient cash flow to repay the loan. The lender will take into consideration your payment history, cash flow, and determine the probability of repayment.


When the lender reviews your assets and collateral, they want to ensure that the assets match the loan type and can support the loan if necessary.


A lender can take into consideration all of the above factors, but a key component that could affect their decision is their personal experience with you. They’ll evaluate your references, your credit reports, and your overall professional demeanor.

Each of the factors plays a key role in determining whether or not you get the loan. It is important to find a lending partner that is reliable and trustworthy for your business loan. Crestmark is a trusted partner to companies in a variety of industries, providing the financing they need to help their business grow.

Check out the infographic to learn more about the 5 Cs of Credit and how Crestmark can help you through the process!


Borrowing Money vs. Equity

With the rise of popular television shows such as “Shark Tank” and “The Profit,” many new business owners are attracted to the idea of exchanging equity in their businesses in order to raise capital. This funding option is now commonplace – at least on TV – so it’s often a first thought in an entrepreneur’s mind when the need for capital arises.

But there is another option: borrowing money. Instead of giving up equity, some companies opt to borrow money, which has a few key advantages over giving up equity.

For starters, debt is typically less expensive than giving up equity in the long run because equity costs you a piece of your business.

“Think about it like this: when starting out, your small business needs inventory and equipment and to make payroll. Investors are going to help you with capital, but you’re sacrificing future profits indefinitely to fill a short to mid-term need,” writes Eyal Lifshitz on Entrepreneur. “With debt, you incur interest costs, but it is temporary and capped. Once you pay it back, your equity remains intact.”

Second, debt can be cheaper than your opportunity costs because you can profit from debt and open up new growth channels. The question, Lifshitz says, is this: “Is the return from this investment higher than the cost of the debt available to me?” Whenever the return is higher, the debt is worth it.

Third, paying interest on debt reduces your tax burden. The cost of interest actually reduces your taxable profit, which ultimately reduces your tax expense. The net result is that you’re paying lower effective interest than normal.

Finally, debt encourages discipline, particularly in the formative and growth years of a company, because it creates an environment of thriftiness throughout the business that could ultimately put the company on track for better margins.

Crestmark has broad experience in providing working capital solutions to growing businesses. If you are exploring options for your business, give us a call today to speak with a lending expert!

Why should I lease construction and forklift equipment?

Whether your next project involves constructing a building or moving a mountain, you don’t want to start down the path of new equipment by making your budget into a mole hill.

Crestmark Equipment Finance allows construction and building companies to acquire the necessary equipment for upcoming projects and update outdated equipment to conform to safety requirements through fixed monthly payment financing programs. Qualified equipment includes: bulldozers; backhoe and other loaders; compactors; excavators; graders; dump trucks; diesel generators; cranes; forklifts and any type of machinery.

Why should you consider lease financing for your construction equipment needs?

Up-To-Date Equipment: Newer construction equipment does not need as much repair or upgrades as older equipment plus it conforms to the latest safety enhancements and improves operator comfort.

• Cost-Efficient: Construction equipment holds a high cost for the newest models. Through financing, a low down payment only is required and you can generate cash flow by utilizing the equipment vs. a large upfront budget cost. Through financing, you only pay for a portion of the truck vs. the entire truck with fixed monthly payments.
• Maintenance: Based on the lifecycle of construction equipment, most owners tend to retain the equipment longer than its useful life (10-20 years), but spend more on maintenance to keep their fleet operational. Newer equipment typically is easier to maintain and doesn’t require as much maintenance as a 10 or 20-year old machine.
• Easy Upgrade vs. Resale: The construction equipment industry has become very competitive including the resale of used machinery. By leasing your construction equipment, you select the term (2 to 5 years) and have the option of purchasing and owning the equipment, returning the equipment or upgrading to new equipment at lease end. If purchased, you must spend the time and resources to sell the equipment. Through financing, your business can upgrade your entire fleet – and easily add on more equipment throughout the lease term as business escalates.
• Vendor Neutrality: As Crestmark Equipment Finance has stated in previous blogs, we accommodate many business owners by having the ability to bundle multiple types of equipment from different vendors into one fixed monthly lease payment. You can select the construction equipment from multiple different vendors – Crestmark Equipment Finance will combine everything into one invoice/payment per month.

Don’t build your budget from an old foundation of equipment when lease financing gives you the flexibility to upgrade to new equipment without getting caught with obsolete equipment. To learn more about our construction lease financing program, please contact Crestmark Equipment Finance or call 888.999.8050.

Tips on The Lending Process for Female-Owned Businesses


If you’re a woman in the process of starting a new business, you’re in good company. The number of businesses owned by women in the U.S. is growing. In 2014, there were over nine million women-owned businesses, employing over seven million people and generating over 1.4 trillion dollars. For inspiration, check out this list of top women entrepreneurs.

This is great news, because it means women have the opportunity to pursue their dreams, support their families, and contribute to the positive growth of our economy – all on their own terms. If you’re in the process of getting started with a business of your own – whether you’re just bouncing ideas around or you have a firm business plan drafted – here are some quick tips on how to finance your new business.

Financing options and lending partners

It’s important to think through what kind of financing you’re going to need, both now and in the future as your business grows. Sometimes starting a business doesn’t require much money, and people can afford to finance it themselves.

But often, more money is needed to get off the ground and running. If you’ve thought it through and know you’re going to need a loan, consider what types of financing exist. A few examples include:

Asset-based lending
• Account receivable lending
• Business Line of Credit
• Term Loans
• Factoring
• Traditional bank financing

The Small Business Administration (SBA) also provides some excellent resources to help women launch businesses, grow their existing business, and compete in the global marketplace.

Before meeting with potential lenders, have the following prepared:

– Business Plan: Having a firm grasp on what your company goals are, and precisely how you’ll reach them is critically important. Your business plan should outline these details, and will provide potential lenders with a thorough understanding of how you intend to run your business. Most importantly, preparing a good business plan provides you with an opportunity to demonstrate your professionalism, attention to detail, and ability to plan – all of which are important to potential lenders.

– Financial Documents: Once you’re moving forward and meeting with a potential lender for a loan, start prepping. Make sure all of your financial information is organized correctly and efficiently. Having the proper reports will help your lender understand your plans for the funding, how you plan to grow, and how you will eventually pay the loan back.
For more on what documents you will need and questions you might be asked, check out this previous post on our blog.

– Answers to FAQ’s: Be ready for questions the lender might ask you. From “Does the business control its inventory?” to “What is the future of the industry,” – have the answers ready. In order to prepare for this, share your business plan with a few colleagues and find out what questions they have. Chances are, they will be some of the same questions that a lender will be curious about as well.

We work with women to fund small-to-medium sized businesses and are experts in this area. If you have questions, or would like more personal advice on how to finance your business, give us a call today!

Why should I lease automotive repair equipment?

As vehicles continue to evolve with smarter technology and wireless capabilities, Crestmark Equipment Finance has helped multiple smaller automotive repair shops and larger dealership maintain consistent service levels by providing competitive, fixed payment financing for their needed equipment.

What type of automotive equipment can Crestmark Equipment Finance lease? All types including: diagnostic equipment, car lifts and floor jacks, wheel balancers, brake lathes, tire changers, battery chargers, paint booths and qualifying technology and equipment.

Why should an automotive dealership, body shop or automotive shop owner think about leasing their automotive repair equipment vs. paying cash?

• Low Upfront Cost & Fixed Monthly Payments: Crestmark Equipment Finance requires a small security deposit to acquire the equipment plus you benefit from fixed monthly payments throughout your selected 24-60 month lease term. Most shop owners do not want to invest a large upfront sum to upgrade equipment.
• Equipment Pays For Itself: Financing your equipment upgrades allows your shop/dealership to generate income (using new equipment) and earmark those profits toward the fixed monthly lease payment. For example, if your lease payment is $400 per month, how many alignments do I need to make on this new equipment to reach that number?
• Vendor Neutrality: Crestmark Equipment Finance remains “vendor neutral” in the equipment leasing industry, which means an automotive repair business owner can select multiple types of equipment and combined them into one fixed monthly lease payment. For example, a shop might need to upgrade diagnostic equipment and lifts, but the owner also could finance new POS or IT systems on the same lease. YOU select the equipment; Crestmark Equipment Finance creates flexible financing options for you to own or upgrade the equipment at lease end.
• Keep Pace With Your Customers: With each new automotive model year, the complexity of today’s vehicle systems become more enhanced, which means upgraded technology and diagnostic systems for proper maintenance of the vehicles. Throughout a lease, you can roll in equipment or software upgrades to match the current diagnostic systems to ensure proper maintenance/repair of your customers’ vehicles.
• Preserve Bank/Credit Lines: Leasing provides off-balance sheet financing for your business including potential tax benefits. By financing your equipment, you can use bank/credit lines for other business-related expenses (i.e., hiring workers, building expansion, etc.).

As a Crestmark Equipment Finance leasing client, you select the proper equipment to drive the success at your facility through low upfront cost, fixed monthly payments during your selected term, and the ability to purchase, upgrade or continue leasing the equipment at lease end.

If you are looking to finance automotive equipment for your business, please contact Crestmark Equipment Finance or call 888.999.8050. 

Why should I lease security and life safety equipment?

In continuation of our blog series, Crestmark Equipment Finance discusses the advantages of leasing commercial security and life safety equipment including security systems, access control, fire and safety systems, and other technology designed to keep your properties and employees safe.

Based on budget, a lot of businesses are pigeonholed into acquiring a security or life safety system which might not adequately provide the protection their building or property needs. With today’s advancements in security technology, your business must take into consideration options for systems, cameras and flexibility to ensure a safe environment.

• Avoid Technology Obsolescence: Currently, the security industry is dominated by technology and virtual security platforms where smart camera can detect the difference between a potential intruder or a non-threatening animal setting off the alarm system. Cameras, access controls and security systems are able to be monitored and even turned on/off through smart phones or computers. By purchasing your security equipment, you are locked into those cameras and systems until an upgrade is needed; by leasing your security system, your business can evaluate after 2 to 5 years to see if your system protects your property or needs an upgrade. Leasing allows you to try out your system and avoid outdated protection.
• Tech Refresh Options: With financing your security systems, you may opt for a Fair Market Value buyout option which provides opportunity to upgrade during the lease term to newer equipment at a designated point in your lease. Why upgrade? Newer systems are usually easier and more affordable to maintain vs. older equipment/systems/software.
• Upgrades: A lease is more flexible in upgrading your equipment throughout the designated lease term. Through your selected manufacturer, you can add more security equipment to your current lease at a fraction of the cost of paying cash.
• Protect Your Budget & Property: Many businesses and municipalities have a limited budget allocated to security, access controls or life safety systems. Through leasing’s fixed monthly payments, you can acquire the system to keep your building or property safe with taking shortcuts due to paying cash upfront. Fixed monthly payments help you budget for the equipment based on your selected lease term instead of not getting the proper system to keep your employees safe.

Remember, Crestmark Equipment Finance offers competitive financing programs for security and life safety equipment that not only protects your properties, but these fixed monthly payments also are designed to protect your budget.

To receive a leasing quote for your security or life safety system needs, please contact Crestmark Equipment Finance or call 888.999.8050.

Why should I lease healthcare and medical equipment?

In continuation of our blog series, Crestmark Equipment Finance discusses the advantages of leasing medical equipment and why hospitals, healthcare facilities, doctor and dentist offices, and other medical-related businesses should consider financing versus a credit line or bank loan.

According to the American Hospital Association, 5,686 hospitals are registered in the United States with 2,904 qualifying as non-government Not-For-Profit Community Hospitals and 1,010 qualifying as state and local government community hospitals. All of these medical facilities also are seeking ways to properly treat their patients with the latest medical equipment and technology without a large, upfront cost to their already tight budgets.

• Municipalities: Hospitals, healthcare facilities and other treatment centers may qualify as a municipality which allows their business to get specialized municipal rates, tax advantages and delayed billing so their payments occur in the next fiscal year budget.
• Collateral: The financed equipment serves as the collateral for the lease transaction. In a bank loan, acquired equipment may be structured under a blanket lien which could lock up additional assets or credit lines. Remember, a lease also provides the option to roll maintenance, software, training and installation costs (“soft costs”) into your lease payment.
• Less upfront payment: Purchasing high-tech medical equipment means a large cash outlay in advance. Utilizing a credit line could involve high monthly interest charges. Applying for a bank loan could involve a 20% down payment (or higher) plus it ties up your hospital’s credit for other needed services (employees, etc.). Leasing requires one payment in advance and payments are fixed throughout the lease term.
• Flexibility: Leasing gives your hospital options to own the equipment, extend the lease or even purchase the equipment through your selected lease term. Crestmark Equipment Finance also has designed specialized programs for hospitals and healthcare facilities to acquire equipment on an “as needed” basis and roll the costs into one fixed payment at the end of a designated period.
• Multiple Equipment Types: Crestmark Equipment Finance remains as a vendor-neutral commercial lease financing provider, which means our leasing experts can bundle multiple types of equipment from different medical equipment manufacturers into one fixed monthly lease payment. You simply select the vendors and equipment; Crestmark Equipment Finance will work with them to ensure proper installation before your lease commences.

Like most types of qualifying equipment, hospitals and qualified healthcare facilities also can leverage the tax benefits of leased equipment, avoid obsolete technology and develop an end of lease option which fits their facility and budget.

To receive a leasing quote for your medical equipment, please contact Crestmark Equipment Finance or call 888.999.8050.