by My Commercial Capital | Mar 10, 2023 | Blog
Sometimes, as the expression goes, “there’s too much month left at the end of the money.” If that is the case with your business, a useful solution can be accounts receivable financing.
What is Accounts Receivable Financing
Accounts receivable financing is the process by which companies, large and small, secure loans against their outstanding invoices. A financing company provides a lump sum of cash based on your receivables and those receivables serve as collateral for the cash that is advanced.
How Does Accounts Receivable Financing Work
First, your business applies for funding with an accounts receivable financing company. The financing lender will require invoices and other supporting documentation.
Second, the lender funds a portion of the invoice total, generally about 80 percent of the invoice value, depending on the industry and the invoiced customers’ credit history.
Third, your business uses the funds as you desire.
Fourth, the lender charges a weekly fee against the loan until the end customer pays his/her invoices.
Fifth, the invoiced customers pay their invoices directly to the financing company. The lender pays the balance to your business less their fees.
Why Do Businesses Use Accounts Receivable Financing
Accounts receivable financing is a financing option for when businesses have short-term cash flow challenges, when they need extra cash for an unexpected business opportunity, to deal with seasonal business swings, when they need to support rapid growth, when they need help to pay for current business expenses, and when they need funds to make business improvements.
The Advantages to Accounts Receivable Financing
The advantages include generally quick approval and rapid funding, an easy application process, there are no long-term contracts required, and there is flexibility to choose the financing amount and financing timing. This approach can smooth cashflow and ease a company’s financial challenges, plus collateral is not needed (because the invoices themselves are assets,)
Seek Expert Financing Assistance
Contact My Commercial Capital, based in Bel Air, MD, for expert financing assistance. We have a wide variety of financing solutions to meet your needs, structured to provide maximum benefits to borrowers.
by My Commercial Capital | Mar 3, 2023 | Blog
Improving cash flow is one of the best things a business can do for its financial health. The following tips can help any business do just that.
Finance Equipment
Buying equipment outright can eat up too much of a business’s cash flow. That’s why many companies use equipment loans or leases. Loans mean your company will make set payments and own the equipment once the loan is paid off. Leases mean your business gains use of the equipment for a set period of time in exchange for payments, which are usually much lower than shelling out a large lump sum.
Weed Out Expenses
Sometimes, improving cash flow is as simple as spending less money. In practice, that means canceling unnecessary subscriptions, vacating unneeded office space, and pursuing other methods of tightening up your company’s spending.
Take Out a Loan
Loans are useful for purchases far beyond equipment. They’re particularly well-suited to spreading out large expenses, such as those associated with renovations, over a long period of time, which preserves cash flow.
Use Invoice Factoring
Invoice factoring occurs when businesses sell unpaid invoices to a lender. In exchange for a fee, the lender will advance a large amount of invoices’ value, then send the rest once they’ve collected the amount due from the party responsible for paying the invoice. This setup turns clients’ unfulfilled payments into immediate cash.
Utilize a Business Line of Credit
A business line of credit can be a lifesaver for cash flow. Once you’ve set up a line of credit, you can withdraw as little or as much money as you need, up to the line of credit’s limit. Your business will only be responsible for paying back the funds it takes out.
Get a Business Credit Card
A business credit card can be useful for making purchases during period of low cash flow. However, you should be aware that these tend to have high interest rates. To avoid paying interest, businesses can pay off their credit card balance monthly.
Want financing solutions tailored to your business’s unique needs? Contact My Commercial Capital today.
by My Commercial Capital | Feb 24, 2023 | Blog
Business taxes are an unavoidable expenditure for any company, but there are many ways to reduce them. This article covers some methods to save money when tax season hits.
Use Environmentally Friendly Vehicles
If your business uses vehicles, you can cut its business tax burden by prioritizing environmentally friendly vehicles. For instance, some electric vehicles trigger a tax credit.
Invest in Solar Energy
Companies that invest in solar energy have two resulting avenues toward reducing their business taxes. One, known as the investment tax credit, is available to companies that install solar-energy-generating equipment. This credit triggers in the tax year the company installs the equipment.
The other tax-reducing perk is known as the production tax credit, which lowers taxes if a company generates electricity by solar means or with certain alternative technologies. This credit lasts for 10 years after the solar system or other technology goes into use.
Donate to Charity
Many small businesses make donations to charity. This can lead to positive press and a good feeling among employees, but it also has a financial benefit, as donations often can double as tax deductions. Making donations just for the tax write-off isn’t ideal; however, if your company is going to make donations for a good reason, it might as well reduce its business tax obligations in the process.
Utilize Depreciation
Depreciation is a widely used method that can lower business tax payments year after year. It does so by letting companies offset the costs caused by the natural deterioration of equipment and other property over time. Certain eligibility guidelines apply — for instance, land is not depreciable — but you may be surprised at how much of your business’s property qualifies for depreciation.
To learn more about financing in the business world, check out My Commercial Capital’s other blog posts. You can also contact us to hear about individually tailored funding solutions.
by My Commercial Capital | Feb 21, 2023 | Blog
Building your business website is step one of your ongoing search engine optimization strategy. An SEO agency can help you rank higher in search results, increasing your visibility to a more significant number of potential clients. Maintaining your site, building links, and gaining traffic require continual management and adjustment to ensure growth for your company.
A professional company with the experience and knowledge to execute optimization techniques can give you an advantage over your competitors. These agencies handle the various components that affect your ranking on search engine results pages.
Research Your Target Audience
An SEO company identifies how your current website performs and compares it with the competition. Professionals can determine which keywords your target market searches for, helping you connect with the people most interested in what your organization offers. They can maximize your budget by focusing on the areas that will have the most significant impact.
SEO Audit
The first step in keeping your website on track is to analyze your existing efforts. This process identifies errors or issues that may be hurting your search engine rank. With knowledge of best practices, these specialists can create a plan that helps enhance your performance in online searches.
Update Your Website Design
An SEO agency can analyze your current site and decide which changes are necessary to improve traffic to your pages. You may require adjustments to your content to ensure your copy connects you to people who can benefit from your services. With the correct keyword practices, you can increase your organic search traffic. Your site may also benefit from design updates that create a more user-friendly experience.
Manage Off-Page SEO
You may not realize you need to address mentions of your company off your website. Your search traffic may suffer if you have negative reviews that you never answered, undesirable backlinks, or inaccurate citations of your name, address, and phone number. Experts can update your directory listings, ensure NAP consistency and obtain authentic reviews that add credibility to your site.
Ongoing Analysis
Unfortunately, optimization techniques are not a “set it and forget it” tactic. SEO requires continual management and updates to keep up with changing algorithms, new information, and shifts in user behavior. An SEO agency will test different approaches, analyze data and examine successful conversions to get the best results for your company.
Maintaining your SEO practices requires a significant amount of time and knowledge. Professionals with experience can accelerate your search traffic to help your operation thrive.
Seek Expert Assistance
The best SEO improves your website content and supports other marketing techniques. If you don’t have a dedicated marketing department, achieving this level of SEO is easier said than done. Fortunately, My Commercial Capital is dedicated to helping businesses of all sizes improve their SERP rankings and grow their enterprise. To schedule a consultation with an SEO expert, call us today.
by My Commercial Capital | Feb 17, 2023 | Blog
Businesses are always evolving. Business growth, sought after by the vast majority of business owners and stockholders, comes in a variety of forms. One of the common ways is by forming a business merger with another company or outright acquisition of another business entity.
Business Mergers and Acquisitions in Brief
Also known as M&A, mergers and acquisitions are actually quite separate from one another. Here are a few of the distinctions:
- Business Mergers. When two or more independent and separately run firms join up to form an alliance where resources can be shared or pooled, it is referred to as a merger
- Acquisitions. An acquisition takes place when one company outright purchases another to gain ownership and control. The net result is a single larger firm.
How To Finance M&A Activity
Both business mergers and outright acquisitions generally require a fair bit of working capital to put into place. Many companies need to look for funding sources to accomplish these activities.
Working capital for M&A can come from a variety of sources. If it is not self-funded, consider the following options:
- Traditional Banks and Credit Unions. There are often the first possibilities that come into consideration. Funding is often denied.
- Asset-Based Lending. In this mechanism, capital is lent using the assets of a company as collateral against the loan.
- Mezzanine Lending. This is a type of unsecured business loan based on the appraised value of the company.
The last two are offered through many financing agencies, such as My Commercial Capital.
Get The Funding You Need
If your business needs funding for M&A activity, call My Commercial Capital. They can provide your business with the financing you need to grow, merge or acquire. Their business solutions are structured to provide numerous benefits to borrowers. Connect with them today.
by My Commercial Capital | Feb 10, 2023 | Blog
A strong business credit score can aid your company in many ways, from helping it secure financing to lowering its insurance rates. If you’d like to raise your business’s credit score, the following techniques will go a long way.
Look Up Credit Reports
Business credit reports are available primarily from three credit bureaus: Dun & Bradstreet, Experian, and Equifax. The process for obtaining your business credit score differs between each agency, but doing so is worth the effort. By seeing your score, you can identify weak points to work on. You may even spot errors, and if that’s the case, you can notify the agency to remove errors and raise your score.
Make On-Time Payments
Counterintuitively, taking on debt may help raise your business’s credit score. That’s because making on-time payments to creditors is a great way to lift a business credit score. The key is to not take on more debt than your business can keep up with, as falling behind on payments is very detrimental. If you’d like to use on-time payments to lift your score, be sure to ask if the lender reports payment information to the three credit bureaus.
Use Credit in Moderation
Credit utilization is another factor that plays into every business credit score. A business’s credit utilization ratio reflects how much of its available revolving credit is in use. (Revolving credit comes from sources like credit cards and lines of credit.) Advice varies on what an ideal ratio is, but many sources recommend using 30% or less of your business’s available credit.
To maintain a good ratio, monitor your credit usage closely to make sure it doesn’t creep up, and always make on-time payments. Another option is to apply for a credit limit increase, though this option should be used sparingly and with caution.
My Commercial Capital has a variety of financing products that can help your business grow while building credit. Get in touch to learn more.
by My Commercial Capital | Feb 3, 2023 | Blog
There are many ways to grow a business. Commonly, businesses get larger by increasing sales, enlarging their market share, or occupying new market niches. Another way for businesses to grow is by the acquisition of another existing business.
Business Acquisition 101
A business acquisition is a transaction that occurs when one company purchases and gains control over another business entity. If shares have been issued by the company being acquired, then the acquiring company will become the owner of a sufficient amount of them to assume control over business operations and direction. Usually, these types of deals require quite a bit of capital, making business acquisition financing an important area to look into.
How To Finance a Business Acquisition
Just like there are many ways to get into business, there are a number of ways to obtain business acquisition financing. Here are a few to consider:
- Funding from a Traditional Bank.
The last two options are examples of alternative business acquisition financing. There are even more alternative lending options to consider. These options are often offered through a business development company or a financing agent such as My Commercial Capital.
Alternative sources are often utilized in business acquisition financing because not every company can self-finance an acquisition, the seller is not able to offer to finance, or the bank may deny funding. As part of your overall preparation, make sure that you have a detailed plan written up to share with a potential lender to help you get the best financing deal possible.
My Commercial Capital Can Help
My Commercial Capital offers a variety of solutions for businesses looking to make a commercial acquisition. They are very happy to help you find a solution that is perfect for your particular business situation. Consider calling them soon.
by My Commercial Capital | Jan 27, 2023 | Blog
Conventional business loans are popular because they are offered by various major financial organizations. However, newer enterprises typically have a shorter credit history, so they may not be eligible for conventional business loans. To those who may not qualify for or prefer not to take out a traditional business loan, the Small Business Administration (SBA) offers a variety of loans tailored to the needs of smaller, newer enterprises. Read on if you’re trying to decide between a traditional loan and a Small Business Administration loan.
What is an SBA Loan?
SBA loans are guaranteed by the federal government and made available to small businesses through the Small Business Administration. The Small Business Administration guarantees small business loans from SBA-sanctioned lenders for as much as 85 percent of the loan’s value. That decreases the lender’s exposure to default by the borrower.
The average interest rate on an SBA loan is between 3 and 7 percent. This rate is significantly lower than small business loans and credit cards.
What is a Conventional Loan?
Financial institutions like banks and credit unions are the primary sources of conventional loans. Lenders will loan you a quantity of money upfront, and you will have to pay it back over time. Fees and interest rates on loans are contingent on the borrower’s credit history and the lending institution.
Unlike SBA loans, conventional loans do not have government backing. If the borrower fails to make payments, the bank bears the loss. Consequently, a high credit score, solid financials, and a proven track record as a business owner are typically prerequisites for qualifying for a conventional loan.
Conventional vs. SBA Loan
Some differences between an SBA loan and a conventional loan include:
- An SBA loan requires less paperwork than a conventional loan
- An SBA loan is more complicated
- SBA loans usually take longer to get approved
- SBA loans offer lower interest rates
- An SBA loan has longer repayment terms
- SBA loans provide more flexibility
- It’s harder to qualify for a conventional loan than an SBA loan
Bottom Line
It’s crucial to weigh the pros and cons of both SBA loans and conventional bank loans before committing to one. As you consider your options, keep in mind the status of your business (whether it’s just starting or has been around for a while), your credit, and your current financial situation.
by My Commercial Capital | Jan 23, 2023 | Blog
Nonprofits need to put significant effort into their marketing activities because their operations often depend on their ability to generate monetary or in-kind donations from individual donors, foundations, and government grant sources. Marketing is particularly important for organizations that generate revenue from their operating activities. Educational institutions and affordable housing developers, for example, must often compete with the marketing initiatives of for-profit business entities. Here are some ways that nonprofits can effectively market their mission and services.
Create Outstanding Proprietary Content
People who are interested in contributing to nonprofits by making donations or volunteering their time will often start a directed search for opportunities online. Marketing for non-profit groups must reflect adequate attention to creating a conspicuous presence with high search engine visibility. Furthermore, people who learn about a nonprofit through its outreach activities need to be able to find information about it online which successfully demonstrates the scope of its work and its ability to use resources well. Good proprietary website content in addition to active social media participation conveys credibility and resourcefulness.
Enhance Online Presence on Third-Party Platforms
Marketing for non-profit organizations involves careful attention to nonproprietary content. The information that people find about nonprofits on third-party websites can play a big role in their overall perception of them. Marketers must put some time into developing organizations’ account profiles on nonprofit directories such as Idealist and VolunteerMatch. Likewise, nonproprietary content with links can augment initiatives to expand online outreach initiatives.
Create Messaging That Resonates with People
Nonprofits which operate in service areas that do not have full public support must be particularly purposeful in their presentation of relevant information about their cause. Marketing for non-profit organizations should include an emphasis on more than one practical benefit of their work. Messaging that they can direct to several different interest groups helps them create awareness about multiple sides of complex issues such as housing, education, or medical care.
All nonprofits achieve their designation as charitable organizations by pursuing objectives that benefit the public. Nevertheless, the need for a nonprofit to address a specific unmet need or the practical utility of the work that it does may not be apparent to everyone. When nonprofits are creating marketing material, they need to present their mission and activities strategically. They cannot assume that the importance of their work or how they seek to advance it is within the realm of common knowledge. Marketing activities are nonprofits’ chance to both educate and persuade their target audiences.
by My Commercial Capital | Jan 20, 2023 | Blog
There has been a dramatic increase in the number of small enterprises that rely on freelancers and consultants instead of full- or part-time workers. However, employers need to know the ins and outs of the independent contractor categorization to comply with U.S. Department of Labor (DOL) and Internal Revenue Service (IRS) rules before entering into an independent contractor arrangement with a worker.
What is an Independent Contractor?
A company or individual that provides services for a third party is considered an independent contractor. A contract is signed between the two parties outlining the contractor’s responsibilities, payment, the scope of work, and other terms. Businesses frequently use Independent contractors as a cost-effective alternative to hiring new employees to fill temporary roles.
How Do Employees and Independent Contractors Differ?
DOL: When deciding if someone is an independent contractor, the Department of Labour looks at the type of work and how much control the person has over it. It also looks at the worker’s chances of making or losing money, how long the relationship will last, and more.
IRS: The IRS considers a person to be an independent contractor if the person paying them only has control over the results of the work, not necessarily how it is done. An independent contractor fills out the IRS Form W-9, and the IRS Form W-4 is filled out by an employee.
Previously, the IRS employed a 20-factor test to assist businesses in determining whether someone was an independent contractor or employee. However, it has now compressed these into three categories.
Relationship of the parties: Does the company offer any benefits? Is the work arrangement governed by formal contracts or oral agreements?
Financial control: Is the business in charge of the financial aspects of the worker’s job?
Behavioral authority: Can management determine which tasks get completed and how they’re completed?
Examples of Independent Contractors
Some examples of independent contractors include:
- Freelance writers and graphic designers
- Real estate agents
- IT professionals
Advantages of Using Independent Contractors
Lower overhead since the contractor is responsible for the overhead costs
Independent contractors are often experts with a specialized skill set in their area
When the project is finished, you can opt to offer another project to the independent contractor or not
Disadvantages of Using Independent Contractors
They may not be available when you need them
Unless specified in the contract, any work the contractor does on your behalf may not be legally your property
You may be subject to an audit by the IRS, the DOL, or another regulatory agency if they determine that contractor more accurately fits the employee definition
Bottom Line
Hiring an independent contractor can save money when a company has one-time needs or wants to get something done that a regular employee can’t. An independent contractor can be a great asset to your team if you pay them properly and follow all applicable regulations set forth by the IRS and the Department of Labor.
