Funding Opportunities and Small Business Industry News

10:34 14 January in Blog, Business Funding

As the year approaches the end, it is time to focus on what steps we could be taking to increase business during 2019. On this front, there is plenty of good news for small businesses, particularly those who are designated as minority-owned, those businesses which have a HUBZone designation, or Service-Disabled Veteran Owned.

Increased Government Contracts May be Available

The U.S. Treasury Department recently released information about the potential of increased contracts during Fiscal Year 2019 for businesses with the previously mentioned designations. This is great news for those businesses who wish to start doing business with the federal government since this is a great way to grow your business.

Understanding the Designations

Small businesses may not be aware they could be eligible for prioritization to win government contracts. Here are the descriptions of each of the categories where your business may have priority over other businesses when it comes to bidding, and winning government contracts.

  • Minority-Owned Business — a small business where the ownership is at least 51 percent controlled by a minority population may request minority-owned designation. Minority is defined as those identifying with specific groups including Asian, Black, Hispanic and Native American.
  • HUBZone Designated — small businesses located across the United States may be surprised to learn they are in a HUBZone. Currently, the commitment is that at least three percent of all government contracts will be awarded to businesses who fall into this category.
  • Service-Disabled Veteran-Owned — these businesses are owned and operated by one or more veterans who have service-related disabilities. Another important note to be aware of is the day-to-day operations must also be managed by a veteran. Overall, there is a commitment to award three percent of contracts to small businesses meeting this criterion. This is in addition to the commitment made by the Veteran’s Administration utilizing the Veterans First Contracting Program.

Rising Wages, Low Interest, Greater Competition

More small business owners are being forced to consider increasing wages because of the tightening labor markets. However, this is not necessarily bad news since interest rates are still well under control. Thanks to some regulations being modified, there is also a lessening of restrictions on small businesses.

During October of 2018, most small business owners believe it is a good time for them to continue to increase hiring, invest more in their businesses and many have experienced greater sales. While this is all positive, most small business owners still feel access to capital is one of the challenges of operating their small business.

Financing Your Growth

Fortunately, small businesses, particularly those who wish to do business with the government have options. Businesses often need additional resources to place successful bids, which in many cases, may be out of reach for a small business owner either financially, or simply due to a lack of contacts.

Capstone Capital Group can help! We have experience helping small minority-owned businesses get the credit they need to grow their business. We also offer a range of services designed to help you get the resources you need to successfully bid on government contracts.

We have helped with non-legal contract reviews, providing bid support letters, and helping minority-owned businesses get the accounting, estimating, and engineering referrals they need to support their bid.

For more information on Capstone’s diverse funding programs, please contact us at (212) 755-3636 to speak with a representative today. Our highly trained, professional representatives will work with you to obtain a minority business loan and start growing your business today. Let us put our years of experience to work and help you grow your business in 2019.

2018 Facts for Small Businesses

15:56 03 December in Blog, Business Funding

 

There are more small businesses in the United States than most people know. Current estimates are there are 30 million businesses classified as small business.  There are more than 57 million people employed by small business owners, making small business an important part of our overall economy. It is estimated small business accounts for more than 60 percent of overall job growth in the U.S.

Geography of Small Businesses

Every region of the United States has small businesses. However, the South and Mid-Atlantic are home to nearly 50 percent of all small businesses while New England and the Farm Belt account for only 10 percent. Keep in mind, by definition, small business is defined as any company employing fewer than 500 employees.

Financing Challenges Associated with Small Businesses

Nearly one-quarter of all small businesses fail to obtain sufficient levels of financing. When you combine this statistic with the decline of banking institutions in the country, this is a sobering statistic. During 2017-2018, 271 banks closed their doors. This means small business owners often had to elect to find alternative methods of financing their businesses.

Impact of Financing on Small Business

Small businesses have always faced financing challenges, particularly during their first few years. Some of the options they have used include:

  • 32 percent depend on company earnings
  • 31 percent depend on credit cards
  • 15 percent depend on large banks
  • 14 percent depend on community banks
  • 13 percent depend on loans from friends and family

When a small business cannot obtain the funding they need, they are faced with difficult decisions. Some of the ways business owners respond to a lack of funding include turning down sales, cutting employees and slowing their operations or growth. Since so many small businesses exist, this could spell trouble for the larger economy. In most cases, one of the primary reasons given for closing the doors on a small business include lack of financing.

Small Business Diversity Statistics

Small business across the country account for nearly 50 percent of all employees. There are a staggering eight million firms that are considered minority-owned. More than 250,000 businesses are considered small business exporters as well.

Challenges Funding Import/Export Transactions

Because of the number of small businesses involved in trade, it is easy to assume they face more than their fair share of challenges when it comes to obtaining funding. This is true at most stages of an export business because there are numerous components including logistics.

Fortunately, Capstone Capital Group can help these businesses by providing a broad range of services to help with export financing. We understand how to structure the right type of transaction to help with financing, provide logistical support when needed, and help you with other aspects of these transactions. We understand how important this is for your continued business growth and that is why we offer customized trade financing solutions designed to meet your needs.

Minority-Owned Business Solutions

Despite the number of minority-owned businesses across the United States, many of these businesses suffer financially because of a lack of resources. There are hundreds of studies showing a minority business owner can still face hurdles when seeking financing options. Like every business owner, a minority must have access to public and private funding sources to help them growth and allow their business time to thrive.

This is when you can count on Capstone Capital Group. We take pride in the fact we have worked with various minority-owned businesses to help them overcome their financing challenges. Thanks to the efforts of our diversity team, we can provide a range of financing solutions to help minority-owned businesses the opportunity to find a solution that best meets their needs.

Small business owners need not borrow money on their high-interest credit cards, reduce their employee count, or turn down potentially lucrative contracts. Instead, contact an experienced member of our team at (212) 755-3636 to speak with a representative today and let us help you get the funding you need.

 

 

Novel Way for Subcontractors to Find Financing from Capstone

A Novel Way for Subcontractors to Find Financing

20:13 11 May in Blog

Novel Way for Subcontractors to Find Financing from Capstone2015 was a picture-perfect year for construction, a banner year for the post-recession. Yet in 2016, many contractors in the United States are struggling to find financing for construction projects.

The lack of financing has been a reality even over the past several years with the economy recovering by leaps and bounds. It was a reality throughout the housing crisis and even prior to the recession when construction and development were booming. Contractor business financing has been a struggle, but it’s clearly nothing new.

Banks’ Aversion to Construction Financing

Banks are perennially gun-shy when it comes to lending to construction firms. They cite the industry’s volatile revenue fluctuations, the unpredictable nature of construction, contractors’ sensitivity to economic cycles, and excess competition as reason to stay away. The recent failure of several prominent construction firms has only strengthened banks’ resolve to avoid offering lines of credit to construction firms, contractors and subcontractors.

Contractors & Underwriting Issues

Steady bank relationships are often out of reach for construction firms with a poor ratio of accounts receivable to accounts payable and limited liquidity in working capital. But when construction firms and contractors struggle to find financing, subcontractors tend to suffer even more. Banks are hesitant to allow subcontractors’ bonded accounts receivable to serve as collateral for lines of credit, and those who primarily engage in bonded work often find it difficult or impossible to provide additional collateral.

Is there any hope for subcontractors in today’s construction industry?

Factoring: A Solution for Subcontractors

Factoring is a finance technique that allows a company to leverage its accounts receivable and accelerate its working capital through the sale of its accounts receivable to a third party. Specifically, a factor gives a business an advance on a customer invoice — generally between 70 to 90% of the invoice amount – so they can create a backlog of work without equity or debt financing. As the company improves their balance sheet, they increase the likelihood of receiving a traditional line of credit from a bank.

Seize Opportunities for Growth with Capstone

For qualified subcontractors, Capstone offers contractor financing and provides a single invoice and full-contract factoring for work performed under contract with a creditworthy general contractor. Capstone has highly experienced construction professionals on staff to facilitate the purchase of construction-related accounts receivable. To learn more about our contractor business financing and other services, please visit our homepage.

Action on Climate Change Boosts NY Construction - Scope explained by Capstone

Action on Climate Change Boosts NY Construction

21:33 15 March in Blog

Action on Climate Change Boosts NY Construction - Scope explained by CapstoneNew York State has experienced much warmer temperatures over the past thirty to forty years, and the sea level along New York’s coast has increased about 12 inches over the past 100 years. Though past trends do not necessarily predict future trends, New York officials are indicating with their investments that a real threat exists.

The threat of rising sea levels has stimulated construction and infrastructure investment across the world, but nowhere has that investment been greater than in New York. A recent article in the Wall Street Journal cited a University College of London study that found New York City outspends all other megacities in countermeasures to rising sea levels, with $2.2 billion alone in the last year.

The predicted challenges of climate change would affect many sectors including water, energy, communication, and transportation—and this means that New York construction firms, contractors, and subcontractors would be a key part of the solution.

Infrastructure Challenges and Construction Opportunities in New York

The Responding to Climate Change in New York State report (ClimAID) published in 2014 identifies numerous transportation, water, and architectural challenges that could impact New York. It also identifies solutions to these challenges—and all of them suggest a significant increase in construction investment in the coming years.

Infrastructure Challenges

• Increased strain on road surface materials
• Stress on electricity grid
• Delays in railroad schedules
• Sagging of large bridges
• Decreased clearance on waterway bridges
• Traffic and public transportation delays
• Reduced building lifespan
• Increased impact of ships and barges

Construction Opportunities

• Convert water managers to handle large variability
• Install more pumps, water tanks, and filters for water supply systems
• Install leak detection systems, low-flow devices, and rainwater harvesting systems
• Upgrade combined sewer and stormwater systems
• Relocate aging infrastructure out of flood-prone areas and construct levees and berms
• Replace old transformers and wiring with heat-resistant models
• Increase seat length of expansion joints on bridges and lengthen airport runways
• Increase capacity of drainage systems and culverts
• Invest in permeable road surfaces and regrade slopes to direct runoff away from roads and tunnels
• Move communication cables underground

What Does it Mean for You?

New York is directing around $20 billion of local, state and federal funding to complete numerous long-term construction projects designed to mitigate the effects of climate change. Half of that money will go to coastal protection and urban drainage projects, which means huge opportunities are on the horizon for general contractors and subcontractors.

Single Invoice Factoring for Qualified Subcontractors

For qualified subcontractors, Capstone provides single invoice factoring for work performed under contract with a creditworthy general contractor. Capstone has highly experienced construction professionals on staff to facilitate the purchase of construction-related accounts receivable. For more information, read our blog, visit Capstone Capital Group homepage, or contact us today.

Benefits of Trade Financing

Four Undeniable Benefits of Trade Financing

18:14 17 September in Blog

The trade financing market is valued at around 10 trillion dollars. The question is: how do you align your business to profit from it? More importantly, what is trade financing, and how does it work?

What is Trade Financing? 

In today’s global economy, having an international clientele can mean the difference between business success and business failure. Trade financing is a kind of loan that provides the credit needed to fund international trade.

Here are a few examples of how it works. Let’s say you identify a growing market for your product in Europe, but don’t have the funds to fill orders there. A trade financing agreement will allow you to do it. What if you find a cheaper supplier in Asia, but the shipping costs are too expensive? Trade financing solutions will allow you to start buying the goods right away and repay the loan with the earnings from your new international partnership.

Other Benefits of Trade Financing

1.    Flexibility

Nothing is worse than seeing an opportunity and not being able to take it. Trade financing gives your business the breathing room it needs to grow when the opportunity presents itself. As such, payments can be made to the supplier in their local currency. And repayment is also tailored to the borrowers’ needs. Some agreements call for repayment in 30 to 60 days, while others allow up to four months.

2.    Convenience

Unlike a traditional bank or business loan, trade financing requires very little documentation. Trade financing contracts are clear-cut and straightforward, so you won’t end up getting surprise fees at the end of the transaction. When you work with Capstone, we focus on providing a convenient, excellent experience.

3.    Security

Making transactions with foreign companies may be outside your usual scope. Capstone has years of experience connecting domestic and international businesses, and we’ll be able to give you all the guidance you need.  Both you and your client will have the peace of mind of working with a security guarantee from a renowned financial institution.

4.    Transaction Flow

Funds are available almost immediately, which means you can improve your transaction flow. You’ll be able to keep your inventory or stock without having to pay large amounts upfront. The trade financing credit can be maintained on your books as working capital, not as debt.

For more information on alternative business loans and commercial financing, visit the Capstone homepage. Our previous blog entries have more industry news and analysis.

Bank Loan or Invoice Finance

Bank Loan or Invoice Finance: What’s Best for You?

21:53 04 September in Blog

Bank Loan or Invoice Finance

Here is the situation: unexpectedly, you receive a huge product or service order. Besides the huge profit you’ll net by filling the order, you’ll also be establishing a business relationship with a desirable client. There’s just one problem: you don’t have the funds to buy the materials or pay your workers to complete the order!

Do You Really Need a Loan?

It’s in situations like this that business owners don’t hesitate. Nobody likes the notion of going into debt, but small business owners know that it’s part of the formula for success. The order is more important to the business’s future than going into debt. Taking calculated risk is what sets them apart from less enterprising individuals. The question is, should you get a bank loan or a get funding from personal invoice financing?

Bank loans are probably more common, but that doesn’t make them better. Until recently, taxis were the only way to get from point A to point B if you didn’t have a car, and hotels and motels were the only place to stay if you were in from out of town. There was a need in the market for alternatives, and Uber and Airbnb filled the niches. The same is true with single invoice finance.

Though bank loans are more common, single invoice finance offers some distinct advantages that you should know before making your decision.

Advantages of Single Invoice Finance

• Receive funding immediately
• Bank loans can take several weeks for approval, whereas single invoice finance can get you funds within 24 hours.
• Repayment is made by your customer
• Less paperwork
• Use only the invoice you are factoring for collateral
• Fewer fees
• Your credit is not important, your customer’s credit is important
• Once your customer pays the invoice, the contract is terminated.
• Won’t show on your balance sheet

Selling an invoice is selling money that technically belongs to you. It’s your asset, and therefore it doesn’t have to be noted on your balance sheet.

Get in touch with Capstone Capital Group and get in the game with factoring, funding, and financing. For more industry insights, read our previous blogs.

Invoice Factoring

Understanding Invoice Factoring

18:42 20 May in Blog

Invoice factoring is a common practice that enables businesses to receive immediate payment in exchange for selling accounts receivables at a discount to their face value. Once an invoice is“ “Factored” and it is time for the customer pays for a product or service, the payment is forwarded to the factoring company. One of the most significant advantages of factoring is that businesses can receive immediate cash flow with no additional debt that appears on balance sheets.  Therefore Factoring is an off balance sheet transaction. Factoring can also be advantageous for businesses looking to obtain initial working capital without having to demand immediate payment from their customers.

The Invoice Factoring Process

Factoring is a rapid process that usually takes less than 24 hours to complete. The factoring process starts after a business delivers a product or service and sends an invoice to their customer. A copy of the invoice is then sent to the factoring company, which will purchase the invoice in exchange for an immediate cash payment. Most factoring companies offer up to 80 percent of the invoice value with the balance going into a reserve account. Once the purchase of the invoice has been completed, businesses can have the money, minus nominal fees, sent directly to their bank account.

Advantages of Factoring

Many businesses choose to use factoring because it can provide a predictable, immediate revenue stream than can be used to fulfill an order. While many businesses request prompt payment, they can rarely expect it in the real world. Even when discount incentives are offered, many customers will still choose to pay later. These problems can be especially challenging for newly established businesses that struggle to convince customers that they can deliver. Businesses that use factoring can receive immediate revenue without having to demand upfront payment or incur excessive risks.

Additional advantages of factoring with Capstone include:

  • Insurance against customers that fail to pay.
  • No penalties for failing to meet a minimum invoice sales volumes.
  • No contractual restrictions on how funds can be used.
  • Practically unlimited financing that scales with business growth.
  • Additional working capital with no additional debt.
  • Take advantage of supplier discounts by paying early.
  • Add more value to customers though attractive payment terms.

How Factoring Affects the Bottom Line

Factoring fees are an average of about two percent, which many business owners argue can add up to a lot of money in the long run. In reality, most businesses that use factoring can earn several times more than the factoring fees that they pay. Studies indicate that a majority of businesses can scale their production capacity by more than 25 percent without increasing fixed costs. Since limited capital is the primary constraint for most businesses, immediate payment can enable businesses to operate at full capacity and earn several times more than the factoring fees.

Business Requirements for Factoring

As with any other credit service, businesses will need to be pre-qualified. Factoring services are only available to legal business entities that sell business-to-business services to governments or other companies. Businesses will need to have customers with good credit to qualify for a factoring service.   It is also important to have no outstanding invoice leans. Most businesses that meet these basic requirements can be approved to take advantage of invoice factoring services.

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.

5 Items to Look Out for When the GDP is Announced

20:28 31 July in Blog
The Bureau of Economic Analysis released an advanced estimate of the United States GDP for the second quarter earlier today. After what many would have designated as a weak first quarter, the US economy gained some momentum in the second quarter and came in stronger than anticipated. The report showed the GDP increasing at a rate of 4%, respectively to a 2.1% decline in the first quarter.
Today’s announcement has a substantial impact on nearly everyone within the US economy. However, is just knowing the numbers really enough? There are certain thoughts that should be placed into question when the GDP is announced. After all, this is an assessment that is used as an indicator of our standard of living. Below we offer five items to look for when the GDP is announced:

Top GDP Stats to Look for

  1. The offset of the loss in GDP in the first quarter with second quarter growth. During the first quarter of 2014 GDP declined by 2.9%. During the second quarter of 2014, the GDP was forecasted to grow by 3%. However in an advanced estimate that was released today, it showed the GDP actually increased by 4% These two quarters essential have left the economy flat for the first six months of 2014.
  1. What are consumers up to? Discretionary purchases and household spending represent about two thirds of the economy.  Depending on consumer sentiment could foreshadow increases in demand which was necessary because the first quarter of 2014 demand increased by 1%.  The government blamed the lack of consumer confidence on the “Polar Vortex” or bad weather.
  1. Business inventories; how high or low are they? In the first quarter they rose by 1.7% which means goods were not being shipped.  Unless this trend has been reversed it could spell trouble for business sales and consumer confidence.
  1. Will the Government revise their numbers? Should the government increase the negative growth percentage for the first quarter of 2014 it could have negative implications for the balance of 2014.  If the revise it in a positive manner it will yield positive results for growth for the balance of the year.
  1. If GDP increases beyond the forecast of 3% then there is a chance that business confidence has increased as well.  This translates into higher production rates and hopefully increased sales and employment.
After a negative first quarter, the GDP rebounded back at an annual growth rate of 4% due to an increase in household spending and business inventories. At Capstone Capital Group, LLC we feel as if this growth may blossom into other opportunities. Capstone is a factoring company here to help your new business start, grow, and thrive. We pride ourselves as a factor whose objective is to help you succeed. We offer single invoice factoring which can provide you with the capital you need to accelerate your cash flow and help your business continue to grow and thrive in today’s market.
For more information on how Capstone can help, please email [email protected] or call (212) 755-3636 to speak with a representative today.

 

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.

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