Safeguard Future Growth for Your Small Business in this Booming Economy

05:26 31 December in Blog, Business Funding

 

During times of strong economic growth, it is easy to lose sight of the fact that eventually, we will see a slow-down. There are some steps you can take today which can help you during the next economic downturn by taking advantage of the current booming economy.

Tackle Your Outstanding Debt

One of the best ways to prepare for the inevitable downturn in the economy is to take care of your debts while the economy is booming. Handling your debt now can help prepare you when business starts slowing down. You will be in a better financial situation if you have less debt.

Consider Upgrading Equipment

Every business depends on their equipment operating successfully to meet customer demand. If you have business equipment which is no longer operating at peak performance, this is the best possible time to consider upgrading. Whether you lease or buy, upgrading will prepare you to better meet your customer’s needs.

Review Your Business Plans and Goals

If you have not recently reviewed your business plan, this is the ideal time to undertake that task. You should be looking at how you have met the goals you initially laid out, and if you have missed any of those goals, determine why. This is also a good time to review your plan for possible diversification opportunities. Keep in mind, the more diversified your offerings, the more likely you will to thrive in a future recession.

Hire the Best Talent

Today, while your business is facing a strong outlook is the time to find the right talent you may need tomorrow to continue to grow your business. This is particularly important if your business goals have changed slightly. Since the labor markets are tight, this process may take longer than you think.

Explore New Opportunities

This is a great time to increase your marketing and expand your footprint. During a booming economy, you can identify new markets, new customers and begin negotiations. Each of these steps will help you increase your business and safeguard your future growth.

Do an Internal Processes Audit

Take advantage of the booming economy to see where you can improve your business processes. The time you spend today to make sure you are maximizing production while maintaining the highest level of quality can help ensure that when the inevitable slow-down occurs, you are positioned as a leader in your industry.

Position Yourself for Future Funding Needs

Even though you may not need funds to manage your cash flow today, you can prepare yourself for the future. One of the biggest pitfalls to business growth is having access to the capital you will need. While you are encouraged to pay down debt during an economic boom, you should plan for your future funding needs during the same time period.

You may be unaware you do not have to take on new debt in order to finance future business growth. In fact, there are numerous options you can use including invoice factoring, purchase order financing, and more. Since you will be hesitant to take on new debt once business slows down, now is the right time to begin preparing for your future capital needs.

Capstone Capital Group has a dedicated team committed to helping businesses achieve their goals. We can help with a range of financial solutions and help you take advantage of the opportunities you have during a booming economy. We can also help provide solutions which will help you through periods of slow growth when cash flow is challenging. Remember, a booming economy will not last forever. You can take steps today to ensure when this latest boom starts slowing down that your business will be prepared.

 

Number One Threat to Long-Term Economic Growth - Explained by Capstone

This is the Number One Threat to Long-Term Economic Growth

12:10 07 August in Blog

Amid positive job reports and a surging stock market, one factor still presents a major obstacle to long-term economic growth in the US: a persistent slackening of productivity. We are currently in the midsts of the longest downward slide in worker productivity since the 1970’s, an unfortunate asterisk that should accompany the latest round of job reports. It’s also likely to keep the Fed from raising interest rates any time in the near future.

Productivity by the Numbers

Productivity — the measure of what goods and services a worker produces each hour on the job — fell 0.5% at a seasonally adjusted rate during the second quarter, according to the Labor Department. That marks the third consecutive quarterly drop in productivity, the longest streak since 1979. What’s worse, the trend shows few signs of abating; productivity growth rang in at just 1.7% from 2007 to 2015, half that of 2000 through 2007.

Why Worker Productivity Matters

For business owners, the importance of worker productivity can’t be understated. The equation is simple: less productivity means more expenses and less profit. On a macro level, productivity is a key gauge in measuring wage growth, prices, and overall economic output — which have all been falling as well.

What’s Killing Productivity?

According to numerous studies, lagging productivity has several culprits. Among the most important are businesses unwillingness to invest in new equipment, machinery, and equipment — the raw materials that translate directly into job growth, wage growth, and gains in worker efficiency and productivity. While the exact cause of lagging productivity is difficult to nail down, it’s worth noting that fixed nonresidential investment, the meat and potatoes of business spending, has also dropped the last three quarters along with productivity.

That lack of investment has lead to a decline in new orders for nondefense capital goods on a year-over-year basis for much of the last year and a half.

What’s the Solution?

As we mentioned in our most recent blog, the majority of US manufacturers are small businesses — and many find themselves sorely lacking the working capital needed to invest in their businesses, jump-start productivity, create backlogs, and grow. As a low-risk remedy, manufacturers and other small businesses with strong demand for their products use invoice factoring to boost their cash flow. That’s where Capstone can help!

Grow Your Business with Capstone

For qualified clients, Capstone provides purchase order factoring, single invoice 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.

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.

Businesses Reluctant to Spend - Capstone

Businesses Reluctant to Spend, Report Says

16:57 29 April in Blog

In a time when consumers are holding their funds close and avoiding spending, a recent report found that businesses are being even more cautious. These findings are likely to weigh heavily on Federal Reserve officials as they consider raising the Federal Fund Rate, despite the fact that they recently decided to delay any increase until at least June.

Business Spending Faltering

Aside from orders for aircraft and defense-related goods, business investment declined by 2.4% in the first quarter of 2016. That means that many companies are reluctant to buy staples like electrical appliances, computers, equipment and heavy machinery. These numbers are reflective of a somewhat bleak economic picture: productivity is low, demand is weak at home and abroad, wage growth is weak, and the global economy is experiencing increased volatility as China’s production slows down.

Earnings Season and Poor GDP Growth

On April 28th, the Wall Street Journal’s prediction of 0.7% first-quarter GDP growth was proven incorrect, and the number rung in at just 0.5%. This bad news came in the wake of earnings disappointments for several major U.S. companies—most notably Apple. Some economists are noting that after years of constant growth, the U.S. economy is bound to plateau. The question remains whether this is a broad market correction or the beginning of a prolonged downturn.

Reasons for Optimism?

One bright spot in the economy is the job market, which has posted steady gains over the last several months. Oil and gold prices have rebounded dramatically in the first quarter, though credit for these recoveries can be attributed to a weakening dollar which inflates their value. Though new orders for durable goods would be expected to rise with a weakening dollar, a recent Commerce Department report found that new orders rose just 0.8% in March—the majority of which were for aircraft and defense-related goods.

Increase Working Capital with Capstone

For qualified clients, we provide the single invoice 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 factoring. To learn more, please visit our homepage.

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.

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.

Position Your Company for Growth

Position Your Company for Growth

18:12 03 March in Blog

Position Your Company for GrowthSince June of 2014, oil prices have declined by over 40% causing the US dollar to surge in value against most other currencies throughout the world. This may have had a negative impact on the oil patch and US exporters, but it is creating greater disposable income for the middle class. According to the New York Times, “Lower energy prices especially with the cold winter we have all been experiencing have been a benefit to all.” The increased value of the US Dollar also increased consumer purchasing power. If the Fed follows through on increasing interest rates mid-year as is anticipated, we will see oil prices drop and watch the dollar strengthen. Initially, there was a concern over deflation, but growth is mitigating that potential problem.

“The forces that were fueling the creation of wealth and leaving the middle class behind were high oil prices, easy money and a weak dollar. Two of the three forces have been quelled that being, high oil process and the weak dollar,” according to the New York Times.

As a result, capital inflows into the U.S. will occur. The economies of the G-20 are all in negative growth or slow growth phases due to high social welfare policies and high taxes. The capital inflows will help create demand in our economy and cause growth as businesses take this capital in and use it to expand.

These trends work in favor of job creation, higher wages and business growth. As was mentioned in our last blog, the low business formation rate over the last six years has reduced competition and given many small businesses the ability to move from start-up to entrenched businesses. These businesses are poised for economic growth and wealth creation. Add to this the upcoming presidential election that will be in full swing by the middle of this year and optimism should prevail through most of the economy.

If it looks like the next president will be friendlier towards business, you will be in for a great period of growth even if policies do not change. The fact that we will have a new leader who at least supports business growth will have a tremendous impact on growth and overall sentiment regardless of which party controls the White House or Congress.

It is imperative that you continue to invest in your business and increase your infrastructure to handle increased demand for your goods and services. Position your company to ride the growth wave as other have in the mid-1980s, late 1990s and early 2000. 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 our Commercial financing, Single Invoice Factoring, give us a call today at (347) 821-3400 and speak to a representative.

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. 

 

Lawmakers Continue to Turn Up The Heat On Big Banks

20:49 16 October in Blog
In a recent hearing before the Senate Banking Committee, lawmakers continue to call for increased regulatory reform from regulators in an effort to reduce the risk big banks pose to the U.S. financial system. 
 
A distinction was made between large banks and other financial institutions. Several senators encouraged regulators to lessen the burden, or possibly exempt, certain insurance companies and small to midsized banks from aspects of Dodd-Frank.
 
Sen. Bob Corker (R., Tenn.), for instance, called on regulators to take whatever steps necessary to make certain these banking institutions are not too complex so as not to be resolved through bankruptcy. 
 
Other senators praised the Federal Government for promising to raise the capital requirements on the largest U.S. banks.  According to Sen. Sherrod Brown (D., Ohio), there is a great deal of support in both the house and senate to implement stronger capital standards.  Such standards could require big banks to retain additional earnings in order to build capital they would use to fund lending rather than allocating such earnings to their shareholders. 
 
Banking executives believe that capital rules for the largest U.S. banks are already too high.
The senators’ frustration regarding Wall Street banks were further expressed in the hearing by Sen. Elizabeth Warren (D., Mass.). She inquired as to why individual bankers were not being held accountable for their nefarious actions which lead to the financial crisis.  Ms. Warren’s concern is that lack of criminal prosecution may send the message that you can break the law, get away with it, and receive a bigger paycheck. 
 
With lawmakers continuing their efforts to put pressure on regulators to come down hard on banks, the ones that ultimately suffer are those looking to banks for capital.  Individuals and small business owners who rely on bank financing may find it more difficult to obtain the loan they so desperately need in order to make payroll or expand their business.  
 
As lawmakers continue to apply pressure on regulators to impose more stringent requirements on the banking industry, it is clear small business and working capital loans will become ever more difficult to acquire. 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 Purchase Order factoring, 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.

Construction Spending is Booming in New York Amid Certain Challenges

17:50 12 September in Blog

Despite the recent surge in construction spending in New York, recent reports indicate the number of permits issued are down compared with prior years. The building congress which promotes the construction industry in New York estimates that while construction spending will increase this year, only 20,000 residential units will be created. This number represents a mere 9% increase in the total number of units built since 2013; this figure is still relatively low since more than 30,000 units were constructed annually during the period between 2005 and 2008.


Although some might see this uptick in residential development spending as a major step in the right direction, others believe there are still some significant challenges which need to be overcome. Particularly in the area of affordable housing. Mayor Bill de Blasio has been pushing for more affordable housing, however experts point to certain challenges including, high cost of land, rezoning issues, and city bureaucracy which makes it difficult for developers to build anything other than luxury condominiums.

 According to Richard Anderson, president of the Building Congress, “While the luxury residential market is booming in Manhattan and in parts of Brooklyn and Queens, we have our work cut out for us in terms of achieving Mayor de Blasio’s plan to create or preserve 200,000 units of affordable housing over the next decade.”


 The good news coming out of all of this is that the number of jobs created as a result of this surge in construction spending. Experts estimate construction jobs to reach 122,700 in 2014. With construction jobs slated to increase this year, the need for invoice factoring by contractors, sub-contractors, and construction companies has never been greater. It is common knowledge that in the construction industry, customers are slow to pay and contractors, sub-contractors, and construction companies for their work. Now these individuals and companies can get immediate cash for their invoices.


 With Capstone Capital Group, LLC’s single invoice factoring program, we can help you move on to the next phase of your project right away, or you can even take on new projects without worrying about additional working capital requirements.


 We have 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 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.

 To learn more what we can do for our and your business, visit us on the web at www.capstonetrade.com, or give us a call today at (212) 755-3636.

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