About US Manufacturing - Capstone Financing

4 Things You Didn’t Know about US Manufacturing

09:37 15 July in Blog

As we discussed in a recent blog, US manufacturing is alive and well—despite what many people may think. Following up on that piece, we are happy to give yet another positive update from the manufacturing sector.

The stars have aligned for US manufacturing in July, with domestic demand strengthening and offsetting the relative strength of the US dollar. US manufacturing activity hit a 9-month high in July, dispelling fears that the UK’s decision to leave the EU would hurt the already poorly performing sector. Factors that are boosting US manufacturing activity include a strong housing market, strong automobile demand, and solid consumer spending: all of which help to increase spending on manufactured goods.

US Manufacturing: Down and Out or Just Different?

It’s true that today’s manufacturing landscape is quite different from that of 1950. It’s even changed significantly since the year 2000, having shed 5 million jobs since the turn of the century. But what many people don’t realize is that it’s not only US manufacturing that’s being transformed. Technological advancements have made it possible to increase production with fewer workers. The end result is a strong (albeit much quieter) manufacturing sector that increasingly relies on tools like invoice factoring to increase working capital and expand business.

Surprising Facts about US Manufacturing

Here are four things you probably didn’t know about US manufacturing.

  1. Most US manufacturing firms are small; 75% have less than 20 employees, and 99% have less than 500.
  2. The US boasts 12 million manufacturing workers —9% of the entire workforce
  3. The average manufacturing worker earned over $4 more an hour than the US average — $25.58 compared to $21.32.
  4. Many manufacturing companies use invoice factoring to boost cash flow and expand their business

Boosting Working Capital with Capstone

For qualified clients, Capstone provides single invoice and contractor factoring for work performed under contract with credit-worthy accounts. We have highly experienced professionals on staff to facilitate the purchase of work in progress and progress billing-related accounts receivable. Please visit our homepage or contact us directly for more information.

Stake for Small Business Owners this Election Season

What’s at Stake for Small Business Owners this Election Season

19:40 29 June in Blog

Stake for Small Business Owners this Election SeasonU.S. presidential elections are a marathon, not a sprint, and this race has been exceptionally grueling—both for the candidates and the public at large. But more concerned than the average U.S. citizen are small business owners, who have responded to the uncertainty by delaying new hires, forgoing new equipment orders, and avoiding all but the most essential investments. We’ll tell you why confidence is slipping and what small businesses can do to buck the trend.

An Unprecedented Election Season?

Every presidential election captures the nation’s attention, but this year’s race seems to have no precedent. Whereas most Americans tune into the race after the primaries are over and the Republicans and Democrats have chosen their respective nominees, both parties saw unconventional candidates challenge the status quo during the primaries and capture the attention—and votes—of millions. Now that the primaries are over and Donald Trump and Hillary Clinton are set to face off in the general election, the future and the direction we’re heading remains as unclear as ever.

Small Business Owners Uncertain

According to a survey conducted by the Wall Street Journal and Vistage Worldwide Inc, one-third of business owners report that uncertainty over the coming election is negatively impacting their business.

Though small business owners are responding in different ways, the overarching theme is this: they have opportunities to grow their businesses, but they’re hesitant to spend the money. It’s not just the election causing concerns—there’s also global concerns, like the recent exit of the U.K. from the European Union, which threw global markets into a brief tailspin and the tenuous state of the Chinese economy. Closer to home, there’s also uncertainty over the timing and impact of future interest rate hikes.

Small-Business Confidence, by the Numbers

Given the picture we’ve just painted, it’s no surprise that small-business confidence fell to its lowest level since November of 2012 this month. Even industries that consider themselves ‘immune’ to political drama, like real estate, construction and development, are seeing activity dwindle. In the end, small businesses off all types face higher cost of capital than their larger counterparts, and that’s why they bear the lion’s share of the burden when uncertainty prevails and consumers reduce spending.

Luckily, there are several tools that small businesses can use to seize opportunities for growth—regardless of the prevailing political and economic climate.

Capstone Helps Small Businesses Boost Working Capital and Grow

For qualified clients, Capstone provides purchase order factoring, single invoice factoring, and full-contract factoring for work performed under contract with credit-worthy accounts. We have highly experienced professionals on staff to facilitate the purchase of work in progress and progress billing-related accounts receivable. Please visit our homepage or contact us directly for more information.

How to Grow Business in an Unnatural Economy - Capstone

How to Grow Business in an Unnatural Economy

21:58 15 June in Blog

How to Grow Business in an Unnatural EconomyStalled growth, disappearing jobs and a sense of foreboding are the defining characteristics of today’s economy. So, what or who is to blame? According to one theorist, the process of “creative destructions,” whereby the death of one business or industry gives rise to another, is failing. We’ll tell you why it’s happening and show you how Capstone’s single invoice and full-contract factoring allow businesses to grow along with demand, avoid taking on additional debt, and improve their balance sheets organically—even in an economy stuck in limbo.

The Numbers

A sobering job report released earlier this month showed the creation of only 38,000 new jobs —124,000 fewer than had been predicted — which is the lowest monthly total since September 2010. Furthermore, the Bureau of Labor Statistics reported that 94,708 Americans were not participating in the labor force during the month of May, bringing the participation rate to 62.6%.

A Limited Recovery

There’s no doubt that we’ve recovered from the Great Recession. The stock market has been on a 7-year bull run—although it has been tested recently. If you’ve tuned into the rhetoric coming out of the presidential race, you’ve heard the conviction that the recovery has been rather one-sided—that the gains of the last 7 years have benefitted a select few while the majority of the population has been left on the sidelines. No matter where you stand politically, the notion of a limited recovery seems to be supported by an analysis of Census Bureau data.

A Tale of Two Counties

According to the Census Bureau, the net increase of new business establishments is just 2.3% since 2010. Compare that with a 6.7% net increase during the 1990 recovery and a 5.6% net increase during the 2000 recovery. What’s worse—over half of the 166,000 new businesses formed in the United States since 2010 are located in just 20 counties. In short, a select few geographic areas are prospering, and the rest of the country is losing businesses and losing jobs at an alarming rate.

Aggressive Oversight and Misplaced Regulation

Touted as the culprits of the financial crash, banks and financial institutions, the drivers of growth since time immemorial, have been forced to tighten their lending requirements. The unintended consequence, of course, is that businesses’ traditional sources of credit have dried up. An enduring irony of the Dodd-Frank Act, which among other things was designed to limit the size of financial institutions, is that its burdensome requirements have actually forced many small community banks out of business—making the Big Banks BIGGER, not smaller.

If a lack of funding weren’t bad enough, businesses are now contending with rising federal regulatory compliance costs and state licensing requirements. And here the bitter irony continues. The new wave of regulations have disproportionally harmed small businesses—the symbol of the American Dream and American industriousness—not the large corporations the regulations were meant to control. A report ordered by the U.S. Small Business Administration found that the per-employee cost of federal regulatory compliance was $10,585 for companies with 19 or fewer employees. Companies with 500 or more employees, by contrast, paid an average of $7,755 per employee to stay compliant. Added to compliance costs are a rapidly multiplying number of state and local licensing requirements. 5% of employees required certificates or licenses in 1950. Today, the number stands at 30%.

A Metaphor for our Economic Ecosystem

There are many apt metaphors that describe what’s happening to the U.S. economy, but one of our favorites has to do with Smoky the Bear and forest fire prevention. Forest fires aren’t pretty, but they’re a natural and necessary phenomenon. They clear away the old, dead wood and give new generations of plants the space they need to grow. If the old, dead wood remains propped up for too long, the ecosystem ends up with less growth, less diversity, and a few individuals soaking up all the sunlight. And when a fire does finally come along, it’s much bigger and more destructive than it ever needed to be.

Boost Working Capital with Capstone

Capstone gives small and midsize businesses that are negatively impacted by Dodd-Frank and other constrictive legislation the working capital needed to seize opportunities for growth. For qualified clients, we provide single invoice factoring, construction factoring and full-contract factoring for work performed under contract with credit-worthy accounts. We have highly experienced professionals on staff to facilitate the purchase of work in progress and progress billing-related accounts receivable. Please visit our homepage for more information.

Interest Rates Predicted to Rise - Capstone Explained

U.S. Economy Picking Up Momentum in Q2; Interest Rates Predicted to Rise

19:56 27 May in Blog

Interest Rates Predicted to Rise - Capstone ExplainedAfter another harsh winter, the American economy is stabilizing and beginning to shrug off concerns of a prolonged slowdown or recession.

According to the latest economic gauges, industrial production is increasing, inflation is firming, and the housing sector is continuing to pick up momentum. All of these factors, combined with data reflecting retail sales rebounds, job gains, and rising consumer confidence, point to improved — though still less than spectacular — growth potential for the second quarter of 2016.

Interest Rates

Fed officials afraid of financial market volatility and poorly performing overseas economies have kept a steady hand on short-term interest rates throughout 2016. A domestic growth rebound in Q2 could be just the inspiration they’ve been looking for to raise rates this summer. Their next opportunities come at the policy meetings scheduled for June, July, and September.

John Williams, President of the San Francisco Fed, recently told the Wall Street Journal that the data is starting to make a strong case for rate increases not just in June, but potentially more than once in the next few policy meetings.

Despite Positives, Some Forecasters Remain Cautious

First quarter 2016 gross domestic product (GDP) increased only 0.5 percent over Q1 2015, but growth might be poised to accelerate.

Since the end of the recession, Q1 GDP growth has consistently been weak, followed by a rebound in Q2. The latest reports of modest but definite growth in highly important sectors would suggest that the same pattern is about to repeat itself in 2016.

Macroeconomic Advisers, a forecasting firm, estimates that GDP will expand at a rate of 2.3 percent this quarter. The Federal Reserve Bank of Atlanta estimated an even higher growth rate of 2.5 percent.

However, it’s not all sunshine and roses. Despite all the positive data starting to roll in, many forecasters are still leery about the economy’s current health as well as its general outlook for the future. Earlier in May, a Wall Street Journal survey of economists revealed an estimated 20 percent chance of a recession taking place in the U.S. sometime in the next 12 months.

Boost Working Capital with Capstone

For qualified clients, we provide purchase order factoring, single invoice factoring and full-contract factoring for work performed under contract with credit-worthy accounts. We have highly experienced professionals on staff to facilitate the purchase of work in progress and progress billing-related accounts receivable. To learn more, please visit our homepage.

Banks Attempt to Finance Small Businesses Fall Short - Capstone Funding

Banks Attempt to Finance Small Businesses Fall Short

16:31 24 November in Blog

Banks Attempt to Finance Small Businesses Fall Short - Capstone FundingSince the financial crash, small loans have represented a decreasing percentage of banks’ overall business. Banks are hesitant to work with small businesses, and—naturally—small businesses are hesitant to borrow from the very same lenders who many believe caused the crash in the first place. Trying to improve the state of affairs, banks have now begun a method of financing small businesses called supply-chain financing. On the surface, this may seem like a positive development for small businesses, but optimism simply isn’t borne out by the facts.

Banks Trying to Support Small Business

In supply-chain financing, a bank purchases the receivables from a company’s smaller supplier and pays them early, giving the company more working capital and flexibility. A company receiving supply-chain financing may receive funds in one month that they need to pay their bills in sixty days’ time, for example.

Problems with Supply-Chain Financing from Major Lenders

In the wake of the financial crash, increasing government oversight, the passage of Dodd-Frank, and the creation of the Consumer Financial Protection Bureau, small businesses have found financing options from major banks and credit unions all but dried up. Those who do manage to qualify for financing have found their service clunky, slow, and inefficient. The problem with supply-chain financing from large banks and credit unions is simple: they’re not truly designed to meet the needs of small businesses. Banks charge interest for the service, usually basing it on the borrowers’ credit, not the credit of their suppliers. As a result, Wells Fargo, Citigroup, and J.P. Morgan Chase & Co. have primarily extended supply-chain financing to large companies—the very same companies that have made it difficult for small businesses and minority contractors to compete. Another problem with supply-chain financing from major lenders is that, because they offer government-secured financing, the paperwork and credit checks needed to qualify often take far too long.

Capstone’s Diverse Financing Options

Small businesses who borrow from traditional lenders take on significant credit risk. Capstone provides personalized service and tailored business funding solutions to meet our clients’ needs. We recognize that many minority contractors, small manufacturers, and small businesses don’t have excellent credit, despite the fact that they have huge opportunities for growth. Our diverse small business funding strategies base creditworthiness on the credit of our clients’ customers, not our clients themselves. This allows us to provide our clients with far more financing than if we lent to them directly.

Celebrating the 100th Anniversary of the Bronx

20:40 15 May in Blog
Claritza Wilshire, Business Development Officer at Capstone Capital Group, LLC attended the Sixteenth Annual Bronx Banker’s Breakfast.  The meeting was hosted by the Business Initiative Corporation of New York (BICNY) and BronxBorough President Ruben Diaz, Jr.
The meeting focused on revitalization of the Bronx’s economic activity and financial projections. The event was part of the several ceremonies commemorating the 100thAnniversary of the Bronx.
Capstone Capital Group, LLC attended with the following institutions: Citibank, Popular Community Bank, Rite Check, Capital One Bank, Hudson Valley Community Bank, Bethex Federal Credit Union, JP Morgan Chase, Ponce De Leon FSB, Spring Bank, Webster Bank, Wells Fargo, Apple Bank, Flushing Savings Bank, M&T Bank, Signature Bank, IDS Corporation, Monroe College, US Small Business Administration, SBDC at Lehman College and SCORE.
Capstone Capital Group, LLC is committed to supporting the development and redevelopment of Bronx infrastructure projects thru its funding programs.
Subcontractors who are winning bidders can rely on Capstone Capital Group, LLC factor programs to assist them in meeting their contractual obligations, working capital needs and supplier credit facilities.
Is it time for your company to partner with Capstone and arrange a factoring facility for your working capital needs? Call us today at (212) 755-3636 or visit our website at www.capstonetrade.com.
View our photos from the Sixteenth Annual Bronx Banker’s Breakfast:
Marlene Cintron, President of BICNY and Claritza Wilshire, Capstone Business Development Office
Bronx Borough President Ruben Diaz, Jr. and Claritza Wilshire, Capstone Business Development Office
Madeline V. Marque, VP of BICNY, Claritza Wilshire, Capstone Business Development Office and Ruben Diaz, Sr.

Get In the Game!

19:00 06 March in Blog
Last week, we wrote a funding support letter for one of Capstone Capital Group, LLC’s clients who submitted a bid on an opportunity with the Port Authority of New York & New Jersey (“Port Authority”).  The company submitted their bid along with a letter of funding support to prove to that they had sufficient access to capital to complete the work.  The company unfortunately lost the bid to another firm who submitted a bid at 50% of the company’s bid.  As a public institution, the Port Authority has to take the lowest bid, but it is not practical for one union contractor to under bid another by such a large margin.  The client was not disappointed by losing the bid because the company bid the work at their best price and at a gross margin that would ensure the survival of his company, which is a fair way to conduct business.
The client is “in the game” because they have a construction factoring facility with Capstone.  The owner is positive about the company’s future because he knows he has the skills to provide customers with the best construction services available in the market along with funding to grow the business.  The client was also aware that this is one of many bids the company will be participating in. 
There is no point in taking low margin work that will hurt your company in the long run.  Many contractors submit low margin bids during slow periods to keep cash flowing and to keep employees on jobs.  The end results are:
·        increased accounts payable
·        liens on jobs
·        an overall loss of reputation 
This happens time and time again. 
At Capstone, we have a policy:
If the gross margin on a job is too small, the related accounts receivable will not be factored. 
Why does Capstone do this?  It is only a matter of time before the owner of the project puts their foot down and stops paying due to the use of substandard materials or workmanship.  There is no opportunity for the client to come out of the job stronger than they went into it without sufficient profit.  Accordingly, if the client cannot make money Capstone will not want to participate in a transaction that will result in a loss of capital even if we get paid in full.  It is not good business for the client or for Capstone!
We have observed that many disadvantaged business enterprises (DBE, MBE, WBE, etc) flounder following the receipt of their designation from the respective state or federal agency.  There is an expectation that work will come rolling in once the designation is granted. 
Without funding support from a working capital facility, an Invoice factoring facility or a company like Capstone, who understands their business model, disadvantaged business enterprises have limited options.  These entities are NOT in the game and are missing opportunities everyday. 
Get in the game! Find a Business funding solutions that will support your growth and bid on opportunities within your skill set.  Opportunities will be won and lost however you’ll always be able to deliver the highest level of service or product possible.  The frustration will be replaced by exhilaration due to company growth.
Take that first step and Get in the Game!

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