Contracting Business Efficiently and Profitably

Grow Your Contracting Business Efficiently and Profitably

17:58 22 July in Blog

Business Efficiently and ProfitablyHave you considered making an investment for growth, but don’t feel that your company is quite ready?

Capstone Capital Group, LLC and Trend Consulting Group have partnered to offer their clients an additional layer of financial and management support.  This additional support is designed to help their clients increase their scale of operations efficiently and profitably.

Our primary goal is to help our clients accelerate and achieve their growth initiatives on a profitable basis.  The two prong approach will sustain our client’s growth in the long term.  To accomplish sustainable long-term growth most companies require competent management and additional capital.  Our additional layer of support provides both essential ingredients to our clients’ success.

Today’s Real Estate and Construction Markets require a high level of performance from contractors.  With elevated performance levels our client’s resources are stretched thin.  We have found that without proper funding and management support most growing contractors are left with two options neither of which should be acceptable to companies that are trying to grow profitably

ONE

Turn down new business and increased demand from existing customers because your company is at capacity and does not possess the capital, internal process, nor the project management in the field to confidently deliver on your contractual obligations.

TWO

Accept more new business than your company can handle only to realize your existing clients will suffer and that you’ve set your company up for losses, negative brand impact, and a reactive business model which typically leads to insolvency or in some cases much worse!

 

The Goal of our partnership is twofold:

1. To give our growing clients access to the funding they need when they need it through Capstone’s flexible single invoice factoring and funding solutions.

2. Deliver effective project management outsourcing solutions through Trend’s comprehensive reporting, process, documentation, and effective field management model.

This one two punch of strategic resources is designed to ensure you are well prepared to grow your business effectively and profitably while boosting your company’s brand and reputation.

Capstone deploys Single Invoice Factoring Programs to fund General Contractors and Subcontractors to ensure on time performance of tasks. Capstone specializes in Single Invoice Factoring (“Spot Factoring”) for firms in need of immediate cash. We provide flexible, no contract invoice purchases in exchange for working capital. Our highly experience construction professionals are on staff to facilitate the purchase of construction related accounts receivable.  They have operated on job sites as project managers, so we understand how critical it is to have available funds for payroll, suppliers and operating expenses. Knowing that Capstone will purchase your invoices provides you with the confidence to bid on new jobs and grow your business.

Trend strives to improve our client’s overall experience while engaging in a new construction project(s). Our goal is to change the “USUAL” way construction projects are managed and improve the process through our comprehensive project management services. We put a heavy focus on process and documentation while managing our client’s projects.  This is accomplished by incorporating our cloud based project management software to help boost overall project efficiencies.  Our service also includes automated reporting capabilities to ensure all parties are well informed every step of the way throughout the duration of their project.

We look forward to hearing from you.

A Case Study From Capstone

A Case Study From Capstone

22:07 18 February in Blog

A Case Study From Capstone

Through the use of Capstone’s unique funding programs, our clients take advantage of opportunities that would otherwise be lost as a result of being undercapitalized. One of our most recent success stories is an interior design firm that was the successful bidder for a Fortune 100 pharmaceutical firm. They required a renovation of the electronic skylight shades for the employee cafeteria.

See Our Current Case Studies Here

The challenge our client faced was a lack of credit, which made the matter a COD transaction. Because the transaction size was in the six-figure range, the client would have had to forgo the opportunity entirely, were it not for access to capital.  Prior to receiving the order, the client applied for a funding facility with Capstone Capital Group, LLC.  When the order was received, the client was entered in our system and we began assisting them immediately.

Long lead-time was another client concern. The order was placed in early November with a late January installation date.  The COD terms required a significant sum of money to be tied up for about 90 days if the terms were kept at COD.  Capstone entered negotiations with the custom shade manufacturer with the client’s participation and arranged for credit and payment terms that were acceptable to all parties. In the middle of January, the shades shipped to an authorized installer’s warehouse as part of the transaction negotiated by Capstone.  Following a few pre-installation meeting with managers of the physical plant, the shades were delivered to the site. The old shades were demolished and remove and the new shades were installed.

As a result, the work was completed and accepted by the Fortune 100 Company, fulfilling the contract between our client and their customer. The client billed the account, Capstone factored the invoice and in March, Capstone will make final settlement with the interior design firm.

The key points to take away from this case study are as follows:
-Capstone client receives six-figure interior design contract and needs capital.
-Capstone client on COD terms for entirety of project with vendors.
-Capstone works with client to create liquidity and structure a PO Finance transaction to create credit with all vendors.
-Custom goods are ordered.
-Custom goods are received, demo is completed, and new shades are installed.
-Work is accepted and completed by Fortune 100 customer.
-Customer is billed.
-Invoice is factored, retiring the PO advances.
-Client receives working capital.
-Accounts receivable is collected.
-Client receives profit.
-100% leverage, 100% of the time.

Capstone Capital Group, LLC provides clients with the capital they need to fund projects. For years, we have helped organizations get the immediate cash they needed without the typical red tape that most banks require. For more information about Capstone and our Single Invoice Factoring, give us a call today at (212) 755-3636 and speak to a representative.

Spring Brings ‘Spec’ Homes

Spring Brings ‘Spec’ Homes

21:54 03 February in Blog

Though winter is still upon us, builders are betting on a strong spring with speculative, or ‘spec’ homes. The construction of such homes is already underway with home builders getting a head start. Speculative homes are homes built without a buyer in place. The advantage of ‘spec’ homes to home builders is the assumption that the wind carrying recent sales will blow into the home purchasing season of spring.

Spring Brings ‘Spec’ Homes

Going into 2015, over 200,000 homes under construction or recently completed were listed for sale by home builders, according to the data released by the Commerce Department. This number is a 17.2% increase from 2014, signifying optimism amongst builders for spring home sales. Since June 2008, the sales of new homes this past December were the highest they’ve been.

With the Super Bowl marking an end to football season and a start to the spring home selling season, builders are prepping ‘spec’ homes for sale. As traction around selling speculation homes grows around March and April, more communities will be opened by builders for a promising spring home selling seasons.

Capstone Capital Group, LLC. Understands the importance of the spring home selling season and the growth it means for the home building industry. For years, we have helped organizations get the immediate cash they needed without the typical red tape that most banks require. For more information about Capstone and our Single Invoice Factoring, purchase order factoring give us a call today at (212) 755-3636 and speak to a representative.

Capstone Launches New Forum on LinkedIn

17:12 28 January in Blog

New York City based Capstone Capital Group, a leading private finance company serving clients in the construction trades, service companies, wholesale, and other arenas, has launched a Capstone Diversity Business Funding Forum on LinkedIn.

With this group, Capstone aims to push new business insights to our clients wanting to grow their companies and connect with other industry professionals. Our dedicated team of experts wants to provide powerful and robust client-specific solutions through Recourse and Non-Recourse Factoring Services, Purchase Order (PO) Financing and International Trade Financing. In connecting with Capstone, you’ll find that we have the capability to provide you with the two crucial aspects to your business’s success—advice and capital.

If you’re a CEO, business owner, manager or investor, our new Capstone Diversity Business Funding Forum on LinkedIn is designed to help you reach your business goals and ultimately enable you to achieve your dreams. This forum allows members to engage with industry thoucapstoneght leaders, cultivate strategic planning ideas and share success stories, common challenges and experiences. Members will learn Capstone’s tips on funding and financing to grow their businesses and experience growth in profits.

“The Capstone Diversity Business Funding Forum is a game-changer because it puts small business owners in the game. Being a minority business owner my entire life, I know the challenges and obstacles that need to be overcome. I am proud to present this group, which will empower minority business owners with the resources and funding insights that are essential in helping their revenues skyrocket,” said Alvin Hartley, Director of Diversity for Capstone Capital Group, LLC.

The Capstone Diversity Business Funding Forum will offer members a full range of insights, discussions and ideas for diverse business needs. Join our LinkedIn forum to connect with other industry leaders and learn the innovative financial solutions that will help your business diversify and prosper. From factoring techniques to funding solutions, our group focuses on topics related to your needs so your business can thrive. We can’t wait to connect! Click here to Join Now!

Alvin Hartley, Director of Diversity, will be the driving force behind the LinkedIn initiative as a diverse director of Capstone Capital Group, LLC. Capstone is a private finance company in New York City that provides single invoice factoring, purchase order, and trade financing that is vertically integrated into its factoring platform. For more information about Capstone and its services, visit www.capstonetrade.com/solutions/diverse-lending/ .

Happy Holidays from Capstone!

21:29 22 December in Blog

Untitled2At Capstone, the holidays are a time for us to reflect on the past year and look to the future. 2014 has been a milestone year for us for all that has been strived for and attained. We achieve what we seek and couldn’t be happier about the growth and success we have seen. We hope you all had a prosperous 2014 as well and cheers to the New Year!

Capstone wouldn’t be a leader in innovative financial solutions if it weren’t for your continued loyalty. And it is in this spirit that we want to thank you, sincerely and truly for your support.

Capstone will be closed on December 24th, 25th, 26th and 31st as well as January 1st in order to ring in the holiday and the New Year with our beloved family and friends.

We wish you a happy holiday and look forward to the start of a healthy New Year!

The Fed’s Answer to U.S. Economic Growth: Let Them Have Loans-With Little to No Risk

15:27 17 November in Blog
In a recent move by Washington to stunt economic growth, Washington agreed to a two-step strategy.  The first step involves Fannie Mae bringing back low and no money down mortgages. The second step would be to discourage business loans.
 
A few weeks ago, Mel Watts, the Director of the Federal Housing Finance Agency, discussed plans to bring back low down payment options for government backed mortgage loans.  In some cases, allowing down payments as low as 3%.  Mr. Watts also suggested other initiatives to expand credit that critics fear may lead to another real estate boom and bust scenario. 
 
Additionally, the banking regulators and the Federal Reserve just approved new rules for “private” mortgage-backed securities.  The proposal wouldn’t require underlying loans to have any down payment at all.  In an ironic twist, the 2010 Dodd-Frank law was enacted to ensure that everyone has “skin in the game”.  However, with the new rules enacted by regulators, it would seem no one is required to have any skin in the game.  The new rules will allow borrowers to put no money down and will also allow them to have high debt-to-income ratios – as high as 43%. 
 
The new rules will allow creators of mortgage-backed securities to bundle pools of the above-mentioned loans and sell them on the secondary market without having any risk of credit.  Without any reform, investors would be duped into believing the risk isretained by the mortgage bond sellers and that these mortgages are safe.
 
In yet another part of the new rules, regulators forced risk retention for so-called leveraged loans.  These loans are made by banks to heavily indebted companies.  They do carry the risk which does not disappear when loans are bundled together. These bundled loans are what is termed collateralized loan obligations (CLO). What is even more surprising is that with these loans regulators mandated a 5% credit risk retention on the buyers of these loan pools.
 
While leveraged loans didn’t have anything to do with the financial crisis, the Fed’s reasoning for discouraging risky business loans is twofold.  Along with the Fed’s campaign justifying “risk retention”, the new regulations may offset distortions in the credit market from experiments in monetary policy engaged in by the Feds. 
 
Nevertheless, some experts believe the solution to all this would be to start raising rates for everyone, and not just certain classes of assets.  Another thing would be for judges to make certain provisions of Dodd-Frank are not applied o CLO managers in ways not intended by Congress.
 
The above should give the new congress something to think about, and the incentive to re-write certain provisions of Dodd-Frank, beginning with the repeal of the provisions regarding “risk retention”.
 
As regulators continue to enact rules making business loans more difficult to obtain, Capstone Capital Group, LLC has the solution. Capstone has been assisting small to mid-sized businesses for years.  They can help your business obtain the necessary working capital you need to help sustain and grow during uncertain economic times.  This is accomplished without all the red tape you would normally get from most banks.  Capstone specializes in Purchase order factoringSingle Invoice Factoring (“Spot Factoring”) and is geared towards firms in need of immediate cash. Spot Factoring is an alternative to business financing in that it provides no contract invoice selling, with flexible terms, in exchange for working capital from Capstone Capital Group.  Give Capstone Capital Group a call today at (212) 755-3636 to find out how we can help your business grow and succeed.

Small Business Exporters Fearing Credit Crunch

19:25 06 November in Blog
Congress made a decision to temporarily extend the Export-Import Bank. However, the decision is affecting business owners who depend on the credit agency. The agency decreases their risks when they export items.
 
The charter was extended by Congress until the middle of 2015. The extended time frame was a compromise between people who trusted the agency and individuals who wanted to get rid of it. Typically, the export-agency is reauthorized by lawmakers every few years.
 
Jennifer Dettman of Shark’s Veterinary Equipment stated that she depended on the bank because it provides open credit for two months. Dettman’s company only has seven employees where everyone builds surgery tables for various animals. Once built, the tables are sold to zoos, universities, and clinics in different countries. The company started using the bank’s insurance program back in 2011.
 
When a client orders a table from the company, the employees manufacture it for nearly two months. The table is insured by the Export-Import Bank for a fee of 0.5 percent of the overall shipping cost. Usually, the company makes each customer pay for this fee. When a client defaults, the company can process a claim after 90 days at the bank. 95 percent of the company’s losses will be covered with the bank.
 
According to Ms. Dettman, the bank provides very good coverage. Dettman also stated that the bank reduces her risks. Dettman knows that there are similar insurance coverage plans in the marketplace, but she does not know the price plans.
 
Trading partners in the United States seek help to support their exporters. According to supporters, the agency lowers the federal government’s deficit. Earlier this month, the agency reported that 675 million dollars were sent to the Treasury Department this year. Congress passed an extension that lasted until June 30.
 
Supporters now want a reauthorization that has a longer term. Last week, a bipartisan legislation was unveiled in the House Financial Services Committee by two key members. The bank’s charter will be extended for five years if the legislation passes. The new measure will require the bank to allocate half of their net earnings every year. A portion of the monies will be used to cover potential losses.
 
As the banking industry continues to get hammered by governmental regulation, gaining access to small business and working capital loans will become more and more difficult to obtain.  Capstone Capital Group, LLC appreciates these concerns and has the solution-Single Invoice Factoring.   Single Invoice Factoring functions as a safer alternative to traditional and unpredictable bank financing.  Our requirements are straightforward and easy to understand.  We are not subject to strict regulatory oversight and control. Capstone Capital Group, LLC is here to help small to mid-sized firms who are in need of immediate cash.  Our Factoring programs provide flexible, no contract invoice selling in exchange for working capital.  Give us a call today to find out how we can help you. 

 

Citigroup, Other Big Banks Pass Midterm Stress Test

17:28 14 October in Blog
The nation’s largest banks continue to prepare for exams to be conducted by the Federal Reserve next year. These exams are to determine whether they have the financial strength to handle a severe downturn akin to the 2008 financial crisis.

Under the 2010 Dodd-Frank financial law, the nation’s too-big-to-fail banks are required to run themselves through stress tests designed to ensure that they can weather another financial crisis. They do this by determining if they have sufficient liquid capital to handle some hypothetical worst-case scenarios. The “stress tests” are the Fed’s way of mitigating against another dismal performance by the banking sector in response to a financial calamity.

Citibank, Goldman Sachs Group Inc., J.P. Morgan Chase & Co. and others have been war gaming in preparation for the official Federal Reserve stress-tests. This round of tests is particularly important for Citigroup, which has had two requests for approval to return capital to shareholders rejected by the Fed. While Citigroup met the Fed’s capital requirements this year, the central bank expressed concern about the company’s competence in measuring the risks facing its global operations.

The Fed uses the so-called Tier 1 common capital ratio as its measure of a bank’s ability to buffer itself against another severe economic downturn. Federal regulations require that banks maintain a minimum of 5% common capital. Citibank chose a hypothetical sharp decline in emerging-market currencies as its doomsday scenario. Defaults by its sister banks in the Far East, and weaker housing markets throughout the region, it assumed, would subsequently occur. It predicted that its ratio would fall to 8.4% under that scenario. The bank’s projected ratio was 9.1% under the stress-test it conducted last year.

J.P. Morgan Chase and Morgan Stanley passed their own midterms with solid results. J. P. Morgan Chase predicted its capital levels under a hypothetical economic downturn would be 8.4%, down from 8.5% a year ago. Morgan Stanley projected its ratio would fall to 8.9%, down from a 9.5%. Bank of America Corp. said it would have the same capital level – 8.4%- that it had last year under a stressed scenario, but said it took on tougher hypotheticals on some fronts.

Goldman Sachs and Wells Fargo & Co predicted they would be in a better position to navigate strong financial headwinds than they were. Goldman pegged its estimated ratio at 10.1%, up from 8.9%, and Wells Fargo predicted its ratio would be up from 9.6%to 9.9%. The Federal Reserve’s annual stress-testing process typically concludes sometime in spring.

As big banks continue to shed riskier investments in order to pass the government’s stress test, small business will most likely suffer.  This is because small business loans may be subject to increased risk ratings making borrowing more difficult. Capstone Capital Group, LLC understands the concerns of commercial borrowers who are considering bank financing.  Accordingly, we offer various business finance options, including “Single Invoice Factoring” which functions as a safer alternative to traditional, and often times unpredictable, bank financing.  Our underwriting guidelines are simple, straightforward and not subject to stringent regulatory oversight and control. Capstone Capital Group, LLC specializes in Single Invoice Factoring (“Spot Factoring”) for firms in need of immediate cash. Spot Factoring provides flexible, no contract invoice selling in exchange for working capital from Capstone Capital Group.  Give us a call today to find out how we can help you.

Regulators Rethink ‘Too Big to Fail’

19:18 03 October in Blog
“Too Big to Fail Banks” (TBTF) has a nice ring to it if you are a banker, but many struggling citizens are demanding tougher regulations on the members of the Federal Reserve System (FED). The United States is considering increasing the surcharge for being part of the FED. Some of this mirrors public anger over the High Street banks of London and the Occupy Movement against Wall Street banks of New York.
 

Bank Profits Up 

In September 2014, FED Governor Daniel Tarullo announced that central banks were contemplating charging higher rates for member banks. This is occurring in an environment with the following characteristics: record bank profits, concerns over taxpayer bailout funds, admitted financial fraud, and economic turmoil. The banks have become a popular target for outrage.
Let us start with the Federal Reserve System. Most people don’t realize that this is a private organization, and it is not a member of the United States government. Yet, it has been given control over issuing the Federal Reserve Note (also known as the United States Dollar).
If that wasn’t enough of a conflict of interest, when the Federal Reserve member banks ran into financial problems, they received a bailout from the US taxpayers. This act increased the level of congressional oversight and scrutiny. After the bailout, these banks enjoyed record profits. Now, the top six (6) American banks control nearly 60 percent of the gross domestic product of the United States, leading to monopoly concerns.

Luxury Tax on Banks 
 
Major League Baseball has a luxury tax on the teams with the largest salaries. The Federal Reserve is considering a similar proposition. Tarullo told the Senate Banking Committee: “We’re all trying to come to grips with what we really need in order to provide more assurance that these firms (top banks) do not threaten the financial system …” Analysts are lamenting that the same problems in 2008 that nearly led to the meltdown of the entire global banking system remain in 2014.
Global regulators have listed 29 banks (including eight in the United States) whose failure could lead to serious macroeconomic distress in the worldwide economy. For example, JP Morgan Chase Manhattan (JPM) may be forced to increase its capital requirements by 2.5 percent of its assets. Many fear that the balance sheets of the top banks remain woefully under-capitalized. The top banks had the biggest surcharge to avoid a repeat of TBTF bailouts.
As regulators continue to target banks, access to small business and working capital loans are sure to suffer as a result. Capstone Capital Group, LLC understands these concerns and offers various business finance options, including Purchase order factoring, “Single-Invoice Factoring,” which functions as a safer alternative to traditional, and oftentimes unpredictable, bank financing. Our underwriting guidelines are simple, straightforward, and not subject to stringent regulatory oversight and control. Capstone Capital Group, LLC specializes in Single-Invoice Factoring (“Spot Factoring”) for firms in need of immediate cash. Spot Factoring provides flexible, no-contract invoice selling in exchange for working capital from Capstone. Give us a call today to find out how we can help you.

Unintended Consequences Feared For New Rule on Loan Losses

19:35 28 August in Blog
Obviously, no bank could stay in business for very long if it lost money on every loan it made. Yet, new accounting rules set by the International Standards Accounting Board would force banks to post losses every time they grant someone a loan on the theory that a certain percentage of loans ultimately go bad. Critics are arguing that such measures are unnecessary and may have the unintended consequence of reducing the number of loans that banks make.


Less Transparency

Critics fear that if banks have to post every new loan as a potential loss, then banks that are having a bad quarter will simply cancel or postpone loans they might otherwise make in order to avoid negative perception. Some banks might do so even in a strong quarter simply to increase the appearance of profitability. The result might be less trustworthy reports and lower transparency in lending. Ironically, profits would look higher, but long term economic growth would be hurt by less available financing. This could be especially harmful during an economic downturn.
 
Effective in 2018 

These new accounting rules would affect over a hundred countries, but would not take effect until 2018. The need for the new loan loss rule was considered necessary due to the financial crisis of 2007-2008, in which banks were criticized for failing to recognize loans that were going bad earlier, thereby making it impossible for investors to protect themselves from bad lending policies.

Mixed Results 

Treating every loan as a potential loss at the outset makes that kind of fiscal blindness impossible. However, it also makes granting each new loan a threat to a bank’s bottom line, at least on paper and in the short term. The fear is that this will result in delaying or denying loans in order produce artificial profits on paper. 

Alternative Proposals

Some members of the Accounting Standards Board are suggesting alternative rules, such as a rule that would force a portion of the interest earned on each loan to be held in reserve in case the loan goes bad. This would accomplish the same goal of getting banks to keep more in reserve to cover their losses, but without creating incentives to deny loans or manipulate the books by strategic delays. It will be interesting to see if that or other alternatives to the currently planned loan loss rule are successfully introduced between now and 2018. 

Alternative Funding Sources
 
While government continues to restrict growth in the banking sector by making loans less available to borrowers, there are options.  Capstone Capital Group, LLC has been helping small to mid-sized businesses for years obtain the necessary working capital they need to sustain and grow during uncertain economic times without all the red tape you normally get from most banks.  Capstone Capital Group, LLC specializes in Purchase order factoringSingle Invoice Factoring (“Spot Factoring”) for firms in need of immediate cash. Spot Factoring provides flexible, no contract invoice selling in exchange for working capital from Capstone Capital Group.  

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