Tips For Financing Your Own Accounts

1. Why Your Company Should Own Credit Accounts

Have you considered what happens when you sell your contracts to an outside financing company? The reason that outside finance companies want your contracts is the same reason you may want to keep them. They take on some risk, do the paperwork and make money! However, you can lose up to half of your profit when you sell your contracts.

Consider the investment that you already have in your contracts. You do all the work required to produce the contract, then you give it away to a finance company. The financing company will screen them and choose only those contracts that meet their requirements and charge you a fee to purchase them. Their only cost is a credit bureau report. If your accounts are good enough for others to buy, they surely are good enough for you too. The only reason that they buy your contracts is because they are profitable. You already have the personnel, a desk and a computer. Add good specialized software, a supply of stationary and you are in the business. One client informed us that it takes an average of 2 hours a day, 6 days a week, or 12 hours a week to work 480 accounts.

Financing is a business that earns money every day of the year. If your business is closed for a weekend or holiday, the interest is still being earned on a daily basis. Interest has no days off or vacations. Payments can come in every day of the month and that gives you cash flow even without making a sale. Here are some other reasons you want to own finance contracts:

2. Save the Discount Percentage:

Most finance organizations require a discount to buy your contract. You would save that amount plus make the interest and fees as additional profit on the sale.

3. Customer Loyalty:

When customers need your products or services, customer loyalty is much greater when they already have good established credit with you. A customer will come back to you rather than open another account somewhere else. This is especially true if they are concerned that they cannot establish another credit account.

With your monthly statements you communicate with your customer 12 times a year. You can place advertising into the statement envelopes and the cost is only time to stuff them.

An added bonus is that you are the one who calls your customer when they pay late.

You may have a great relationship with your finance company, and they may handle your customers just as you wish, but many retailers find that they lose customers that have been poorly treated by other outside financing companies.

You can develop much better customer relationships when your own personnel call for collections because you have a vested interest in them. Outside finance companies do not always care about your customer relationship.

Usually they do very little to help or accommodate your customer. It is very advisable to know the financial condition of your customers. Because you control the accounts you know when a customer is late paying. That gives an early warning to watch the account very closely.

Construction Equipment Financing – Options

A few months back, I was contacted by a Construction company in MN who was looking to finance an excavator that they found through an affiliate of our company. The owner had gone to his Credit Union to get the financing since he had been dealing with them for the better part of the last 10 years for his business financing.

To his disappointment his company was turned down even though he had existing financing with the Credit Union and not missed a payment in 5 years.

Now understand, this Equipment Loan was not an optional purchase that he wanted to do, it was a necessity as the equipment that was being replaced was not repairable and without the new excavator, he was forced to either turn away work or rent one for daily use.

The reason the Credit Union gave as to why they could not do the Equipment Financing for him was because of program changes. The Credit Union even tried to get him personal financing for the equipment, unsuccessfully though.

Fortunately, the Vendor of the Equipment knew just what to do. He had directed him back to the Internet Site that he had found the Vendor at and instructed him to fill in a Request for Quote for Equipment Financing.

Once the business owner did get in touch with a Commercial Finance Broker, the financing was all set up with a Specialty Lender within a week of receiving the complete application.

The biggest reason this happens is because Banks and Credit Unions are general Financial Institutions, not Specialty Lenders. There is a big difference between getting a bank account or personal car loan when you have great credit and worked at the same well paying job for the last 5 years and being a Company looking for Financing on Specialty Equipment.

Even if you do get an approval at your bank, it may not be a bad idea to speak to a Commercial Finance Broker anyways as there are many Specialty Lenders that may have a better Finance product for you. At the worst, you can compare approvals to see which works best for your company.

By Wade Henderson

Why Early-Stage Startup Companies Should Hire a Lawyer

Many startup companies believe that they do not need a lawyer to help them with their business dealings. In the early stages, this may be true. However, as time goes on and your company grows, you will find yourself in situations where it is necessary to hire a business lawyer and begin to understand all the many benefits that come with hiring a lawyer for your legal needs.

The most straightforward approach to avoid any future legal issues is to employ a startup lawyer who is well-versed in your state’s company regulations and best practices. In addition, working with an attorney can help you better understand small company law. So, how can a startup lawyer help you in ensuring that your company’s launch runs smoothly?

They Know What’s Best for You

Lawyers that have experience with startups usually have worked in prestigious law firms, and as general counsel for significant corporations.

Their strategy creates more efficient, responsive, and, ultimately, more successful solutions – relies heavily on this high degree of broad legal and commercial knowledge.

They prioritize learning about a clients’ businesses and interests and obtaining the necessary outcomes as quickly as feasible.

Also, they provide an insider’s viewpoint and an intelligent methodology to produce agile, creative solutions for their clients, based on their many years of expertise as attorneys and experience dealing with corporations.

They Contribute to the Increase in the Value of Your Business

Startup attorneys help represent a wide range of entrepreneurs, operating companies, venture capital firms, and financiers in the education, fashion, finance, health care, internet, social media, technology, real estate, and television sectors.

They specialize in mergers and acquisitions as well as working with companies that have newly entered a market. They also can manage real estate, securities offerings, and SEC compliance, technology transactions, financing, employment, entertainment and media, and commercial contracts, among other things.

Focusing on success must include delivering the highest levels of representation in resolving the legal and business difficulties confronting clients now, tomorrow, and in the future, based on an unwavering dedication to the firm’s fundamental principles of quality, responsiveness, and business-centric service.

Wrapping Up

All in all, introducing a startup business can be overwhelming. You’re already charged with a host of responsibilities in which you’re untrained as a business owner. Legal problems are notoriously difficult to solve, and interpreting “legalese” is sometimes required. Experienced business lawyers know these complexities and can help you navigate them to avoid stumbling blocks.

Although many company owners wait until the last minute to deal with legal issues, they would benefit or profit greatly from hiring an experienced startup lawyer even before they begin. Reputable startup lawyers can give essential legal guidance, assist entrepreneurs in avoiding legal hazards, and improve their prospects of becoming a successful company.