How to Stay Ahead of Your Debt

Keeping yourself out of debt can be a tricky thing.  It is difficult for many people to even recognize the amount of debt they are in before they realize that they have been overwhelmed with credit card payments, house payments, and car payments.  It is important to stay ahead of your debt as to not become overwhelmed and begin only paying the minimum payments every month.  There are a few things that you can do to ensure that you stay ahead of your debt.

First, keep yourself focused and maintain a solid budget.  There will be times in your life that you will need to determine between wants and needs and it is important to only go with your needs if you do not have the money on hand.  That fancy car or new computer will be there when you are out of debt so make sure to focus on your priorities.  Making sure not to spend money on things you don’t need will help you greatly in staying out of debt.

Another thing that you can do to stay ahead of your debt is to possibly get a second job.  If you run into car troubles and are running low on funds, it is always an option to work another job until you can pay off a good portion of your debt.  While nobody wants to work full time at one job and then take on another job, it will be very beneficial to you and your debt.

Lastly, sell the stuff you don’t need.  If you are driving around with two cars and you have debt piling up, sell a car.  You do not need two.  If you have a bunch of fancy jewelry but you don’t have money to pay for your lights, sell some jewelry.  Sell anything you don’t need and get ahead of your bills. 

Keeping yourself ahead of your debt is a long process but once it is finished, you will have a huge weight off of your shoulders.

What is a Debt for Equity Swap?

 

Certain companies may occasionally need to restructure their financing throughout their business life.  One of the reasons this may happen pertains to wanting to stay within their contractual agreements.  Some lenders require a company to maintain a certain debt to equity ratio.  Other times a company may not want to pay face value payments or make their coupon payments.  An option to avoid such thing is to partake in a debt for equity swap.

A debt for equity swap is just what it sounds like, it’s when companies swap equity for their debt.  This is typically done with only a portion of the outstanding debts.  For this to happen the creditors must agree to the trade.  The price of the swap is dependent on the market rates that are currently going on. 

On some occasions, the decision makers may offer a higher exchange value for their debt.  This is done in order to attract the debt holders to the offer and make the exchange seem more appealing to the creditors. 

Alternatively, some people opt for an equity/debt swap.  This is essentially the opposite of a debt for equity swap.  In an equity for debt swap the shareholders are allowed to exchange their stock for bonds in the company. 

Although there are two options under this category, it is typically the debt for equity option that is used the most.  This is the one that offers financial relief to the business that is in need of restructuring. 

 

What is a debt for equity swap?

Corporate Refinancing- A Step By Step Approach

Restructuring your debt isn’t only used as a debt relief mechanism in a time for trouble.  Occasionally refinancing your debt can help your company out greatly in the long run.  A time when refinancing is a great option is when interest rates decline or if your business is doing very well. 

Here are some steps you can take for corporate refinancing. 

Evaluate

It’s important to plan at least a half of a year in advance for your corporate financing task.  You have to be able to evaluate your company, and not let any personal biasness get in the way.  It’s sometimes best to have a third party evaluate your company’s credit rating.   It’s beneficial to have these numbers on hand regularly in case the interest rates decline rapidly.  At times interest rates will rise just as quickly as they dropped. 

Preparation

Ensure that you are constantly creating a good credit rating with your creditors.  Some companies have even noted taking out loans that are unnecessary in order to simply build a credit rating.  Accumulating good credit is a must when it comes to getting the opportunity to partake in corporate refinancing. 

Implementation

After you’ve evaluated your company and realized that refinancing would be something beneficial to you, it is time to begin the refinancing process.  By building relationships with financing companies you will have a wide variety of options open up for you.  It’s important to pick the right restructuring option.  As we’ve talked about, you can issue equity in relief of some of your outstanding debts.  Another thing you could do would be to renegotiate the current terms of your debt with your creditors.  This will require both parties agreement.

Corporate restructuring doesn’t have to always be associated with negative feelings.  Occasionally the refinancing is done because of a positive increase in the company’s profits and credit rating. 

What is the best way to prepare for corporate refinancing?

When is it Time for Corporate Debt Restructuring?

Financial hardships are never something that a business owner wants to think about, however sometimes even the most well thought out businesses have to face them.  When these hardships arise, and the inability to meet your obligations becomes prominent, corporate debt restructuring may be a valid option. 

Corporate debt restructuring consists of making an effort to reduce the financial burdens that a company holds.  The basic way of doing this is by allowing for the company to have more time to pay their obligations and by reducing the interest rate that is being paid.  On occasion allowing your creditors to have equity in your company may reduce the principle sum of the debt.  It’s times like these that negotiating with your creditors is very important in order to avoid having to file for bankruptcy. 

An important thing to remember about corporate debt restructuring is that it’s important to not let yourself slip too far before you opt for a restructuring plan.  These plans, if enacted correctly, should bring s speedy relief to the financial situation of your company. 

It’s also imperative to keep in mind that the need to restructure your debts does not indicate a failure of any sorts.  Having to restructure should not be embarrassing for you or your company, it should actually be viewed in an opposite light.  Past experiences have shown that corporate debt restructuring, if done properly, can reflect positively as responsible and knowledgeable management.  Both internal and external recipients view it positively. 

Corporate debt restructuring is not a last case scenario.  It should be at the forefront of your mind when you first notice your financial struggles. 

How an Unsecured Line of Credit Can Work for You

As is the case with many small businesses, having an open line of credit is a must in order for a company to succeed.  There are many different options for financing a company and one of those options is an unsecured line of credit.  Applicants with good credit are typically able to use their personal credit history to obtain a line of credit for their company. 

How it works is that instead of offering up something you own as collateral for the credit, such as a house or a car like a secured line of credit would, you simply are charged a fee.  When you begin receiving the line of credit, you will be charged a pre-set annual fee in place of collateral. 

One major benefit of having an unsecured line of credit is that you are able to borrow more as needed and pay it back whenever you are able to.  This can benefit small businesses greatly because as long as you continuously pay it off when you can, the money is always there.  This can help you fulfill purchase orders and pay bills while you wait for your receivables to be converted into cash on hand.  Another benefit of a line of credit is that they typically have a better rate than a credit card would offer.

While having an unsecured line of credit can be great, it is not going to be a solve-all to your company’s money problems.  Typically with unsecured lines of credit, the risk of default is high so lenders protect themselves by limiting the amount one person can borrow.  If you make consistently pay off your balance, your credit amount will go up.  Ensuring your company never borrows more than you can pay off is one way to increase your company’s limits.

Unsecured lines of credit can be very beneficial for companies that have money in their receivables that will shortly be turned into cash.  It provides cash on hand that you know can be paid back on time. 

 

 

Fulfill Your Customers’ Needs Through Purchase Order Financing

It is a problem that happens to many companies.  You have a purchase order from a customer but you do not have the money on hand to pay the suppliers for the raw materials needed to fulfill the purchase order.  You try to go to the bank or other investors but they are unable to get you the funds to fulfill the order.  What do you do? Well one option your company has is purchase order financing. 

Purchase order financing is a financing option that would enable you to get your purchase order financed on a short term credit agreement.  How it works is that after a purchase order has been made, the financing company will determine whether or not the customer can pay.  If the customer can pay, the financing company will contact your raw materials supplier via letter of credit and the supplier will send you the goods to assemble. 

After the goods are assembled and sent out to the customer, you will await confirmation of the goods being received.  Once received, you will send an invoice, payable to the financing company, to the customer who will in turn pay the financing company.  Once the financing company is paid, they will take their fee and send your company the remaining cash.

Why is it a good idea? Well the main reason is that it fulfills a customer’s needs and will in turn, keep the customer returning to you with their business.  It is bad businesses to turn down an order you are capable of making solely because you were incapable of obtaining the raw materials.  Losing customers means losing money and that is a good way to run a company into the ground.  Purchase order financing is a great way to obtain a small amount of money quickly to complete a customer’s purchase order.

What is account receivable factoring?

Getting Financial Help with Accounts Receivable Factoring

In a small business, cash is king.  All small businesses need cash on hand to maintain operations and continue to grow.  You have bills that need to be paid and money needed to fulfill purchase orders.  Sometimes, you may not have much cash on hand but you do have an excessive amount of money in your company’s receivables that simply have not been paid yet.  What can you do? Well, one option that your company has is called accounts receivable factoring. 

Account receivable factoring is done when a company asks an accounts receivable factoring company to purchase their current receivables in order to get immediate cash on hand.  The receivable’s company will research and investigate to determine whether or not the purchase is acceptable.  If the offer is accepted, the receivable company will pay the client company a large portion of the payments as well as future payments on the receivables while also keeping a portion of the funds as a payment for their services.  The main large payment is typically around 90% of the value of the current invoices.  Should a particular customer default on a payment, the receivable company will sell the invoice out to another company.

Account receivable factoring can be beneficial to a company for many reasons.  One main reason that factoring can be beneficial for a company is that it gives a company cash funds immediately to use as they need.  In the event of an unexpected incident or opportunity, quick cash can be the difference between a company succeeding and failing.  Cash on hand can make all the difference in the world when it comes to paying off creditors. 

Many small businesses need financing and account receivable factoring is just one of many different options that are out there.  If you are still unsure, contact America Corporate Turnaround to determine if account receivable factoring is the right one for you.

What is purchase order financing?

Keeping Small Business Out of Bankruptcy: What You Need to Know

When it comes to running a small business, it is going to begin as an uphill climb.  Many small businesses do not actually even record a profit for about three years.   About 70% of small businesses remain after two years and about 50% survive five.   Keeping your company out of bankruptcy is going to be vital to making sure your company stays above water. 

Start with Enough Cash

One way to ensure your small business avoids bankruptcy is to always have enough cash.  As obvious as it sounds, many small businesses will try to run their company on credit and this business model is not going to last long.  If your company is running on no money, it will cause a major distraction for you and keep you from advancing the company.  One way to do this is to ensure you borrow enough money when you get your startup cash.  Most small startups do not borrow enough money at the beginning of their business and this can come back to haunt them.   

Consult with an Expert

Another way that your small business can avoid bankruptcy is to hire an outside consultant who can bring in a fresh new idea to the company.  When you are the only manager around it can become difficult to constantly come up with new ideas for the company.  Hiring an outside consultant can be like a new beginning for the company.  These people are experts at assisting small businesses and have a plethora of information they would be able to share. 

Discipline Your Budget

Lastly, a major way to avoid bankruptcy is to decide how much money you would require for living expenses, bare minimum, and only take that from the company.  Do not try and live a lavish lifestyle with a giant house and multiple cars.  Keep yourself realistic on what the income your company has brought in and don’t live outside of your means.

Your business is your live so make sure you do everything you can to sustain it.  Cut cost where you can and maintain new ideas to keep your company out of bankruptcy. 

The Pros and Cons of Equity Based Financing

When operating a business, being able to raise money is a must.  You never know what trouble is going to be around the corner and you may need to borrow some money to make it through.  One way to raise funds is through equity based financing.  Equity based financing is when you raise capital for your business by selling stock in the company to investors.

There are good and bad to everything so let us first look at the pros of equity based financing.  The main major advantage is it is not your money.  If the business goes under, you are not on the line for repaying bank loans back thousands of dollars.  You can aim as high as you want and not need to worry about what happens if you miss.  This is a quick and easy way to raise capital for your company especially in a hurry.  Another advantage is you can focus on the task at hand and not need to worry about paying back bank loans.  This is nice because it frees you up to run the company.

While it is nice to not need to worry about paying the money back, equity based financing isn’t all pros.  One major con is if you are selling equity when the company first is starting, you can lose money in the long run because you must sell your shares so cheap.  This can be costly if your business ends up doing extremely well.  Another con of equity based financing is you lose a chunk of your company.  This means portions of money you make are now going to another person and they can also have a say in how the business is now ran. 

There are both pros and cons to equity based financing.  If you have any more questions, contact us at American Corporate Turnaround and let us know if we can be any assistance. 

What is one big tip to remember when raising capital?

Getting Your Business Going Without Bank Loans

When your company is starting out, it is important to begin financing right away.  Starting your business out is one of the trickiest things you can do.  With the economy the way it is, it is becoming more and more difficult to obtain start up cash.  Here are a few things you can do to get going.

First, if you have no money whatsoever, sell anything and everything you possess.  Anything you do not need that will not contribute to your company should be sold.  Say you have an extra car or a boat, get rid of it.  You don’t need your thousand dollar watch if selling it can help your company.  If your company pays off like you hope, you can buy those things again later.

 

Another way you can obtain some funds to get your business going is to take out the equity on your house.  While it is not ideal, it is a quick and easy way to obtain some early financing for your business.  If you do go down this road, make sure to set some of the money aside to help make your monthly payments on the money you just took out.  You do not want to get in over your head when it comes to your house.

 

Another way to help obtain funds would be to borrow from people you know.  Friends, family, and acquaintances looking to make an investment into something are a good way to get a small amount of startup money.  Many times if a company is too new or too small, banks will be more reluctant to give them a loan.  It is important to still get any agreement in writing as to avoid any possible conflict later.

 

There are many ways to raise capital for you and your company to begin to grow.  Let us at American Corporate Turnaround assist you however we can. 

Tips on Raising Capital

Every company needs money but when your business is starting out, your business may not bring in money for the first year or two.  In the meantime you are going to need to finance your company so you can start running your business.  Before you just take any money you can find, here a few tips that will help you make the best decision.

First, always borrow more than you need.  When people are starting companies up, they realize they are going to have to owe people a lot of money.  While it is understandable that you do not want to be in more debt than you need to, many times smaller business fail is because they didn’t have enough money to continue financing.  There are many unknown business expenses that are going to arise that you may not have thought of.  Be prepared and over borrow, not under.

Next, conduct research on the various types of financing available for you and figure out what is best for your company.  There are many types of financing and it is important to make the right choice based on the time and manner in which you can repay it.  You do not want to get locked into a contract that demands quick repayment if you will not be able to achieve that.  Make good use of your internet and conduct thorough research on your options.

Last, make sure you find investors you respect and like.  When you borrow money from people, you begin a new relationship with somebody you will most likely be in business with for many years.  On top of lending you money, they will also be able to give you advice and assistance.  You need to find a lender who will be supportive and helpful towards you and your company.

There are many different types of ways to raise capital and American Corporate Turnaround would love to help find the type to suit you.  Let us know how we can help so we can start helping your business grow. 

What is a benefit of equity based financing?

What Mezzanine Financing is All About

As everyone who has ever taken a business class knows, you have got to spend money to make money.  You try to help your company grow but sometimes you are not able to obtain sufficient funds to help your business grow.  Many times a company will go to a bank to obtain a loan but if you do not have the collateral to back it up, it will not be approved.  One way to solve this problem is through mezzanine financing. 

Mezzanine financing consist of a hybrid mixture of debt financing along with equity financing.  In mezzanine financing, the company receives an unsecured loan from the lender.  In return for the loan, the lender will able to convert his loan into a stake in the company should the loan be defaulted upon.  Since they are done rather quickly and there is no form of collateral for the lender, the loans do typically carry a very aggressive interest rate of around 20-40%. 

There are many ways to obtain mezzanine financing.  A good source to start looking at is private investors.  Mezzanine financing appeals to private investors because of the high interest rate that will be paid back to them and the possibility of obtaining a stake in the company should they not be repaid as agreed to. 

Though it seems simple, not all companies looking for mezzanine financing will be able to get it.  First, the company looking for mezzanine financing needs to have a good track record of repaying lenders.  They also must have a solid plan for expansion or at the very least, company growth.  The company must also have an established product and steady business.  Last, the company must have a history of obtaining a profit. 

Mezzanine financing is a great way to raise money quickly for company expansion.  If you and your business are looking to raise money, let American Corporate Turnaround help you out. 

Popular Areas of Stress In Small Business And How To Avoid The Trap

Anyone who hasn’t been in business before tends to have a certain view of the small business person. There is a level of envy at ‘being their own boss,’ a degree of the notion they are rich and a certain amount of respect. For those in business they know there is a whole lot their ‘non-business’ friends aren’t getting- like the stress. Owning your own business can be loads of stress. Thankfully, there are ways that you can learn to manage it so you don’t have to succumb to it.

1.       Make Use Of Everything You Can

We are talking about using social network devices, talk to local networking agencies, get involved with small business branches and discuss different ideas. If you’re a person who tends to resist change; don’t. There are many new advances that can go a long way to helping you streamline your business. Technology has new computer programs and smart phones that will make your work much faster-take advantage of these opportunities.

2.       Seek Advisors

In the business world, it’s very easy to get caught up in the thought process that no one knows what you have to go through. No one knows what your business deals with and even more importantly- no one deals with the same things you do. This simply isn’t the case. There are many business people who will tell you that business is business is business. Start talking to others and see what they do.

3.       Keep Your Focus

It’s very easy to get caught up in the wide range of different business opportunities. You are best served if you create a plan with achievable goals and work toward these. Direction can help you keep your focus and in the end this will help you grow your business.

Remember when you are looking for advisors to not rule out the wide range of services that are available to businesses.

My business is expanding and I'm looking at my options in purchasing the equipment I need?

What Are The Key Areas Of Debt Small Business Deal With

 

All businesses, including the largest corporations deal with debt on one level or another. When it comes to small businesses it can quickly turn from a few bills to an overwhelming situation. One of the key causes for this is lack of organization and lack of knowledge. Many people don’t even know where they may incur debt from if they haven’t been in business before.

Leases

Chances are your business will need a site to operate out of and this will cost money. Some people may consider purchasing a building but for business it is often better off to be able to move where the opportunities may take you.  This means you will have a monthly or yearly lease and usually you will have triple net fees in addition to this.

Loans

There are few businesses operating these days that don’t have some sort of loan out. It may be in the form of a simple bank note and not be ridiculously high. For other businesses there may be quite a few loans that have been taken out over the course of time. Each of these loans may have different and confusing interest rates and large penalties making it seem impossible to ever get out from under them.

Advertising

It is true that in most cases you’ll have to spend money to make money.  This statement was made with advertising in mind. If you want to make sure that you keep people coming in you’ll have to spend money to tell them what you have.

Inventory

Depending on your business you could have fees for inventory or fees for supplies. These can add up and are often on a credit line basis that carries an interest as well.

Contractors

Perhaps you need work done or you run a business that depends on contractors, either way this is an expense that can add up.

Credit Cards

The fastest way to get a loan is on plastic. There is a cost for this and it comes with high interest.

What Are Important Steps To Keeping Taxes From Stressing Your Business Out

For most of us taxes are overwhelming. Consider taxes for a business and they can quickly turn into ridiculously difficult bits of paperwork that are not only hard to keep track of but tend to make anyone looking at them grow nervous and sweaty. Most small business owners will tell you one of their biggest areas of stress is their taxes. The good news is there are some ways you can learn to minimize the stress associated with taxes.

·         Keep up on your paperwork regularly. The more often you take the time to keep your books accurate the easier it will become. The more familiar you are with a task the less nerve racking it can be. This is true of all things and in particular taxes. Make sure to set some time aside every couple of weeks to insure you stay ahead of your taxes.

·         Don’t be afraid of the government. This means a few different things. The more fear is behind your taxes the less likely you are to do them and you’re even far less likely to do them correctly. If you have questions don’t be afraid to call your local or federal government.

·         Hire a great accountant. A good accountant can be worth their weight in gold. They will help you find exclusions and exemptions so you can keep as much of your money as possible. This will save you dollars in both the short and long run.

·         Hire a fantastic debt restructuring company. Getting the right professionals for the job may seem daunting when you first consider the costs but once working with them, you will see the massive benefits your business reaps from it. Having debt managed by professionals will not only allow you a chance to feel secure it will also allow you to focus on other areas of your business like bringing in new clients and expanding.

What is Mezzanine Financing and its advantages?

Mezzanine Financing Can Help Your Business With These Simple Steps

 

There is one core essential to every successful business and that is working capital. Working capital is a term used to describe cash or easily liquid-ready assets that is available to a business or entity for use. Without working capital a business can quickly become dead in the water.

What Are The Different Means To Get Working Capital

To ensure you have money in the bank for bills, inventory and payroll among other areas of accounts payable, you have a few areas to get working capital from.

·         Cash revenue

·         Investment dividends

·         Loans and financing

Where Does Mezzanine Financing Stand In The Capital Department

Commonly called ‘Mezz’ financing, the strategy is available for publically traded companies as well as businesses that are held privately. For the most part this type of financing offers both the features of equity (warrants/options) and debt (principal and interest payments). It is better ranked than previous debt but less than holders of equity as far as security goes.

Some of the common uses for Mezz financing are:

·         Buyouts of management

·         Recapitalizations

·         Acquisitions

·         Leveraged buy outs

·         expansions

Elements Of Mezzanine Financing

There are a few elements you’ll want to become familiar with when considering this kind of financing. The first is payment in kind interest (PIK). This means there will be an amount of stated interest that is added to the principal on a periodic basis. This is generally paid back in a lump sum or bullet installment at the end of the loan.  You will also want to familiarize yourself with cash interest. This is when Mezzanine financing looks most similar to traditional debt; you will have regular payments that include interest.  Finally, there is the ownership option. In this instance the lender receives the warrant or option to change to equity. For the most part in smaller companies this will be purchased back over time.

The Basics of Mezzanine Financing

So you’ve got the ‘billion dollar expansion idea’ for your company.  Now it’s time for you to raise the capital before you begin.  Determining which method of financing you are going to pursue is nearly as important as the business itself.  Certain amount of research is necessary to ensure you are picking the finance option that works best for you and your business.

It’s nearly impossible to talk about mezzanine financing without first touching on the basics of debt and equity financing.  The reason for this is due to the hybrid nature of mezzanine.

 
In basic form, mezzanine financing is essentially debt capital that can be turned into equity capital.  Here are a few definitions to consider when thinking about this hybrid:

Debt capital: Basically a loan.  The borrower will be given money from a lending agency with an agreement to eventually pay it back.

Equity capital: A financial exchange.  The lender will give capital on the basis that it will be exchanged for ownership or stock in the business.

Mix those two definitions up and you will have a good idea what mezzanine financing consists of.  This type of capital starts off as debt capital, however if a loan is not paid back in full, or on time, the lender has the rights to convert their investment into equity capital.

 
These aggressively priced loans are a great way to finance if a quick cash flow is needed.  The main risk relies on the lender, who is given either little or no collateral.  This type of loan is also typically subordinated, which further explains the amount of return that the lenders generally seek. 
When sifting through the financing options, keep in mind the time frame you need the money, the return you are willing to give up, and the amount of risk you are willing to take.  These components vary greatly from option to option, and may be a deal breaker when choosing financing.

How can you make an audit less stressful?

Getting Into the Green: Avoiding Business Debt

When you are running a business, the one thing you want to do your best to avoid is business debt.  While having business debt isn’t always a bad thing, it is important to get ahead of it to ensure the debt does not continue to grow. If your company has too much debt, it can lead to many bad things such as; you start borrowing too much, you start cutting into your revenues, you no longer have money left to pay any bills, and you even have the possibility of going bankrupt.

When trying to reduce business debt, one of the first things you can do is contact your suppliers. Having a strong business-to-business relationship with a supplier will make them more apt to the possibility of negotiating a payment plan out. Next, you need to find a way to increase revenue. If you have a product that is highly demanded, maybe try raising the price a bit and see if that helps decrease the deficit.

 

After those steps are done, consider restructuring the business. Raise some money in ways other than just the business. If you have a bunch of unused equipment sitting around the business, sell it off.  All those extra supplies that you probably won’t need could be sold too. Another good step would be to reduce operating expenses. Be more aware of how much energy and water you use and try to limit them.

Lastly, you need to raise more capital. There are many ways to go about raising capital for a business. Try and find some investors in the company and use their money to settle debts. Let them know what the money is being used for and explain to them how this will help the company get ahead and begin its growth. There are many good, useful tips for ways to lower your business debt so make sure to do plenty of research and even contact a professional to help you make the right decision for your business.

Can you wait until tax season to plan for your taxes?

ACT: Helping Finance Your Business

While American Corporate Turnaround does a lot of debt restructuring, they also work with many different lenders for financing your business as well. Check out the following options to see if any are right for you.

One way ACT offers financing is with account receivable factoring. This is when you would sell your account receivables to others at a discounted rate in exchange for immediate cash. If you are in a hurry to get a certain amount of cash but can’t wait for the person who owes you to pay it, this is a very good option.

Another option is merchant cash advance. This is very similar to a receivable factoring in the sense that you get immediate payment. The difference between the two is that you are agreeing to pay the third party a percentage of future sales instead of selling sales that already occurred.

Next, there is equipment leasing.  Equipment leasing is a good option because there is a low out of pocket expense involved. Everything can be included in the lease and this frees up your money for you.

Asset based financing is also a good way to finance a company. This provides working capital that is secured by the company’s assets.

Last is purchase order financing. This is done when a distributor doesn’t have the funds to pay the manufacturer but does have a purchase order that needs to be filled. A purchase order company would pay the manufacturer to complete the order then collects payment from the buyers. The company would then take their fee before releasing the funds to the distributor.

American Corporate Turnaround has many great options for assisting you in financing your business. Let us help out and see if we can help make your business grow.

3 Ways to Avoid Small Business Stress

A recent report done by Bank of America found that running a small business is almost three times more stressful than raising kids and over twice as stressful as maintaining a healthy relationship.  A little stress is inevitable when being in business for yourself because you are the one who has to make all of the decisions. Here are a few tips to help you keep that stress down to a level that you can deal with.

1.    Be positive. There are countless factors of owning a small business that you have no control over.  Running headlong into the great unknown is scary and when you have a lot on the line it can seem like failure is inevitable.  No matter how bleak you can imagine things becoming it is far more productive to remain optimistic about the future of your business.  Small business psychology has shown that optimism will not only reduce your level of stress but it will also allow you to have the faith you need to make wise business plans and improve sales.

2.       Don’t be afraid to ask for help.  27 percent of respondents to the Bank of American survey stated that they did not consider themselves to be financially savvy.  Feeling overwhelmed with the finances of your small businesses will raise you level of stress.  Finding financial advisors that you can trust and depend on can ease a portion of that anxiety.

3.    Become a friend to technology.  In many ways being in business for oneself has gotten a lot more stressful than it was in our grandparents’ day.  Luckily there are many technological advances today to help balance out some of that added stress.  Good accounting software can help you keep track of your accounts receivable and create invoices to help you avoid late or missing payments due to your company.  Also, online bill payments and arrangements for funds to be automatically taken out of your accounts can help you stay on top of the money you owe to creditors and utility companies with little effort on your part. 

What are the practical tips can you share to small business owners regarding financial literacy?

Four Steps to Financial Literacy for Your Small Business

Managing a small business is a big responsibility and it’s one that needs to be taken seriously.  One bad month financially can be a slippery slope and before you know it you will be closing your doors forever.  With proper planning and precautionary actions you will be prepared to deal with whatever life has to throw at your small business.  Here is a list of four financial precautions to take to ensure that your small business has a long, healthy life.

1.       Make your credit work for you.  Credit scores are everything in this day and age.  Your credit history follows you everywhere and has a big effect on your businesses success.  By paying off or making payments towards your existing lines of credit, you will keep your credit history looking solid.  A positive credit report guarantees that you are able to secure a loan and will qualify your business for lower interest rates.

2.       Monitor your spending.  Create for your business a monthly budget.  Balancing your revenue with your costs will protect you from overspending.  Keeping an accurate record of your cash flow will help you predict patterns in your finances.  You can look at your previous year’s budgets to know what to expect in the months to come.

3.       Stay on top of your accounts receivables.  Small businesses depend on their accounts receivable as income.  The money generated from these accounts determines the amount of cash flow you have to invest back into your business.  Good accounting software can help you to prepare invoices and keep track of payments.

4.       Don’t be caught off guard by Uncle Sam.  Tax time can be stressful for any new business.  Keeping accurate records of your revenue, expenses and capital through the year will help you avoid this stress.  There are many tax breaks available for small businesses.  Keeping track of important receipts and expenditures can help you take advantage of these and save your business lots of money.

Keep your Vendors Happy, Keep your Customers Happy

Having a good relationship with your suppliers is vital to the success of your business.  Suppliers and vendors keep your shelves stocked with the essentials to keep your business running.  Whether you need products to turn around and sell to your customers, paper and office supplies for your day to day operations or even just pop in the vending machine, you rely on your venders and suppliers everyday.  It’s important to have suppliers that you can trust equally and important to let them know that they can rely on you to fulfill your end of the arrangement.

A good relationship with your supplier often means that they will go above and beyond the call of duty for you.  If you need an item in limited supply and another company also needs the item, you want to make sure that the supplier chooses you.  Being respectful of your supplier’s time and of the role they provide for your company goes along way towards establishing such a relationship.  You also need to be mindful of the fact that your supplier is running a business also and they need to be paid on time.

If a bad run of luck and overwhelming debt has prevented you from paying your supplier or vendor in a timely fashion, corporate debt restructuring can help you to get back on the right track with them before it’s too late. A debt settlement is just the thing to reduce the amount you spend on old debt and increase the amount of capital you have each month to, among other things, pay back your suppliers.

As businesspeople themselves, most suppliers understand that everyone goes through a rough patch from time to time.  Chances are if you have worked previously to establish a good relationship with them they will give you the benefit of the doubt for a while.  It’s important, though, not to take advantage of that trust and get your finances back on track as soon as possible so that you can pay your vendors off in a timely manner and keep your business running smoothly.