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2014 Medical Business Loan Guide and Tips

Click the image for our medical factoring program. Clients that exceed $500,000 in accounts receivable may qualify for our asset based receivable financing program — Click the image for our medical factoring program.
Clients that exceed $500,000 in accounts receivable may qualify for our asset based receivable financing program

Like any other business, starting a medical clinic of your own will require startup capital. This may seem problematic at first, since you need to file a lot of paperwork beforehand. It may also seem like applying for a 2014 medical business loan can be very tedious too. However, applying for loan to start your own clinic can actually be easier than for other types of businesses, since offices and clinics of medical doctors are among the types of businesses which enjoy a very high success rate after 5 years.

Here are some tips to keep in mind:

Make sure you have a stellar credit history. That means you should make sure that you always pay your credit card bills and car loans promptly. It’s also nice if you don’t have any other significant debts, such as student loan debts. A bad credit history may indicate to banks that you are a poor choice on which to invest their money.
Go to different banks at the same time. You should file a loan application to at least 3 banks. You are essentially shopping for a high-cost product (capital) and so you want to do your due diligence and see which lender offers the best terms. Applying for a bank loan also takes weeks and even months, so you should do it simultaneously instead of applying to banks one at a time.
Make sure that you follow the application procedures properly. Keep track of deadlines for form submissions, and stick to the truth when putting down your financial details. Basically, you want to demonstrate more assets than your liabilities, such as student loans and a mortgage.
You’ll want to see which ones offer the best rates. The usual rates are at about 2 to 3 points above the prime rate. You’ll also want to know which banks can get you the full amount of money you need. Another aspect you need to check out is the term of the loan, which usually goes from 5 to ten years. Five years may be too short a term, because the loan payments per month will be higher. But ten years may also not be ideal because they tend to carry higher interest rates. That means that you will pay more money in total for the loan. In general the best term is about 7 years. The interest rate will be tolerable yet the payment scheme won’t be too high.
In general, loan payments consist of interest payments and payments toward the principal. See if you can get a reasonable period when you pay only the interest initially. That’s because you are still building up your patient list, and there’s a delay on when you’ll get your payments from the insurance companies. By paying for the interest only at first, you should have enough working capital to cover your operational expenses.

Starting your own clinic is a great, perhaps even sacred, profession. But it is still a business. Make sure that you spend your 2014 medical business loan wisely!

The Importance of Business Working Capital for Sub-Contractors

Sub-contractors are different from general contractors. General contractors are the ones who are in charge of a project, and they’re the ones who get to pick the sub-contractors to do the job for them. But sub-contractors aren’t employees either. The agreement between the general contractor and the sub-contractor is not between employer and employee, but a business-to-business contract. And because it is a business, there is a need for business working capital for sub-contractors as well.

Technically speaking, sub-contractors exist in every industry. A wedding planner may be tasked to create the perfect wedding ceremony, but to do that they have to hire musicians and caterers. Those musicians are therefore technically sub-contractors who are tasked to do a certain job as part of a bigger project. But in popular usage, a sub-contractor is usually part of the construction business. Your job as a sub-contractor may be to deal with the plumbing or with the electrical wiring. You don’t deal with the homeowner directly, and instead the general contractor contacts you with the details and schedule of the job.

If you are a subcontractor, you need working capital for a lot of expenses, such as:

Liability insurance. This is often a requirement, and since you’re not an employee the general contractor won’t provide for insurance. You have to pay for your own liability insurance yourself. Sometimes that’s not the only thing you need; you may also need to get workman’s compensation insurance or risk indemnification.
Travel expenses. As a sub-contractor you need to travel to different places. You have to go where the job is. That’s the nature of your work. And if the work is far enough from your home, you’ll also need to pay for your lodgings and your meals. Unless it is specified in the contract between you and the general contractor, all these expenses are your responsibility.
Equipment. Since you’re not an employee, it is your responsibility to obtain all the tools you need in order to do the job that you are contractually obliged to perform. There’s no other company that will get you the tools you need.
Training. You are also responsible for your own training and there is a real need to upgrade your skills. One reason is that there may be new tools available which you need to familiarize yourself, or they may be new procedures you need to master. And you should also always try to improve or expand your knowledge because that makes you more likely to get the attention of a general contractor.

While you may think of yourself as a freelancer, as a sub-contractor you’re actually a business entity. As a business, you need to make sure that you can perform your day-today tasks, and that means you need to make sure that you have the cash available. Business working capital for sub-contractors is crucial, especially if you want to make sure that you are rehired by the same general contractor who chooses you in the first place.

Take Advantage of a Beverage Company Factoring Line

If you run your own beverage company, try to go with a factoring company that has experience dealing with beverage companies.

For a regular importer or beverage company, having some ready working capital is always a problem. That’s the nature of the business, because most of their assets are often tied up in their inventory or in their account receivables. If you own a beverage company, you may always find yourself running low on funds to run your monthly operations (for overhead, utilities, and salaries) because the payment schedules of your distributors are generally slower than the pace of your expenditures. That’s why a lot of lenders and other financial assistance providers offer more alternative ways of supplying working capital. You can even take advantage of a beverage company factoring line.

Different Types of Factoring Services

If you take the time to research about factoring, you may find yourself becoming confused. That’s because there are many different types of factoring. Factoring companies also offer different advance rates and varying fee structures. Part of the confusion is that terms such as factoring and invoice discounting may be defined differently, depending on the organization you deal with.

But the advantage here, once you actually discover the details of a particular factoring service, is that often the factoring can be customized to fit your particular needs. You may be able to make use of additional services such as investigating the credit-worthiness of new clients, processing the invoices, and even collecting the payments from clients.

A Line of Credit

A regular line of credit is one of the more traditional ways of obtaining working capital from lenders. If you own and use a credit card, the process is similar. You can borrow money up to a certain amount, so for example if you have a $100K line of credit then you can borrow only up to $100K before you need to pay it back with interest.

The advantages here are that you can borrow the money when you need it, and you also only borrow the amount you need. With traditional loans, if you borrow $100K, you have to pay interest on the full amount, even though you only spent $60K. With a line of credit, you can then be approved for a $100K line of credit but only pay for the $60K which you need, plus interest. So you still have $40K available, which you can use anytime you need it.

The Factoring Line

The factoring line usually works the same way, although of course this again depends on the particular factor you work with. Essentially, the total of your invoices can determine the limit of the factoring line. The factor may buy only a certain number of them, or you can be the one to choose as to which invoice you will sell to the factoring company. Like a line of credit, you have a limit as to the total amount of the invoices you can sell.

If you run your own beverage company, try to go with a factoring company that has experience dealing with beverage companies. They may be your best way to determine if a beverage company factoring line is appropriate for your situation.
http://www.neebocapital.com/Markets-we-factor/food-and-beverage.html

Why the Utility Industry Needs Factoring

A business in the utility industry faces lots of challenges. First of all, acquiring the equipment, machines, and infrastructure for utilities is a very expensive endeavor. You could easily spend hundreds of thousands of dollars on one equipment alone. And when you consider the fact that often times your clients have payment terms, cash flow can be a problem. Fortunately, factoring can handle this situation easily.

Why Factoring is Important

The reason why factoring is so important is that it gives you the money necessary to operate and expand your business. The same money can also be used to pay for bills. By signing up with a reputable factoring company you will have an easier time signing in other carriers. The reason of course, is they know the factor’s reputation. This also means you can use the opportunity to strike a negotiation for discounts.

Aside from this, a factoring company can provide more incentives that can help your company prosper. Because the utility industry is very competitive, hiring the right factor is essential. If you’re going to hire a factoring company, they need to have the rates and programs your business specifically needs.

Other Benefits of Factoring

Anyone who has worked in the industry can tell you that some clients just take too long to pay up, and carriers even more so. When this happens your credit rating goes down and the revenues along with it. With a factor this won’t be an issue and a utility business can be assured of bills paid on time. In addition a factoring company will help in carrier payments and make sure that nothing is left unpaid.

Second, these factoring companies offer several programs with different payment options. Regardless of your budget, a factoring company will be able to provide an option to help you out. If you have never used factoring before, what all this translates to is immediate funds for invoices and no more headaches.

Factoring companies can offer much more than these, as they can provide different kinds of factoring services including recourse, medical, spot and traditional factoring. In addition these companies may also provide related services such as asset based lending and more.

Today it isn’t difficult finding a factoring company, but you need to make sure that the invoices you provide are for completed tasks. By making sure the invoices are free of legal issues or other problems, transactions will proceed smoothly. If you have never availed of their service before, rest assured that factoring is legitimate and acceptable.

A highly reputable factoring company also provides customizable payment payment schemes and online accounting. There are of course several factoring companies so you need to make sure that you hire professionals and those with experience.

If you’re looking for a factoring company that caters to the utility industry, there’s NeeBo Capital. Located in Boca Raton, Florida, NeeBo offers rates as low as 0.59% – 1.5% for 30 days. In addition there is no financial or monthly minimum needed, and the terms are very flexible.

Why You Need Janitorial Services Business Working Capital

. If you need more working capital, contact Neebo Capital

When you first start a janitorial service company, you have to make sure that you have enough startup capital to fund your necessary initial expenses. You’ll have to furnish your office, buy all kinds of cleaning equipment, buy some computers, and even purchase a delivery van. You’ll also need to make sure your personnel gets the training they need in order to do their job efficiently and properly. You also need to think about marketing, and in today’s world that means having a strong online presence. And finally, you should also make sure that you have enough janitorial services business working capital so you can continue working and providing services while you wait for the money to come in.

After your initial expenses, you have to take into account the many other expenses you need to take care of on a regular basis. These expenses include:

Payroll. Your janitorial services company will need workers, which means you need to make sure they get paid on time. If not, they’re not going to hesitate leaving your company.
Training. Cleaners come and go, and you may find yourself hiring new workers which have to be trained properly. You need to develop a program or a mentoring system to make sure all your new workers know their responsibilities and tasks.
Utilities and rent. You will also need to make sure that you have enough cash available so that you can take care of your water and electricity bills. If you have a website, you may have to pay for that on a regular basis as well. And unless you bought your own place, the rent for your office will also have to be part of your expenses.
Cleaning supplies. You’ll need a steady supply of cleaning agents, including soaps, wax, bleaches, and industrial cleaners. Rags, wipes, and paper cleaners will have to be replenished as well.
Equipment maintenance. Once you buy your cleaning equipment, you’ll also need to make sure that they are in good working condition. They have to be cleaned and maintained regularly, and their storage should be appropriate as well. You should also make sure that you don’t overlook your company vehicle too. Proper vehicle maintenance must be done, and the truck you use for your business will need regular tune-ups and fuel. If any of your equipment is damaged or begins to malfunction, you should have enough working capital to take care of repairs and replacements.

Most people who are just starting a business think of janitorial services business working capital simply in terms of cash. But that’s not always the case. If you need cash in order to fund the day to day operations of your company, you also have other assets to use which you can convert into cash. You can use your equipment or even your location (if you own it) as collateral when you try to get a loan. You can also use your accounts receivables to get a cash advance through factoring services. If you need more working capital, there are always other ways to get them.

4 Types of Unsecured Business Loans for New Sub Contractors

If you are a sub-contractor, then you have to make sure you have the skills, the equipment, and the contacts of general contractors so that you have a steady supply of income. Usually, you don’t go into the business for yourself unless you have already developed the skills you need for the jobs you want to do, and you also have made numerous contacts with general contractors who are aware of how great of a worker/company you are. You should also have saved enough money to secure the equipment needed to perform your tasks. If you don’t have enough money, then it’s possible to get some funding from lending institutions that offer unsecured loans for sub-contractors.

Here are a few common sources of capital:

Friends and family. Typically, the people who are likely to have faith in your ability to pay them back are the ones who know you best. You may be able to acquire some extra money from those close to you, especially if you demonstrate that you have already saved some money on your own. Unsecured loans may mean that you don’t have much to lose when you are unable to pay the loan, but demonstrating that you have already saved money as well can show that you are serious and determined to succeed.
Credit cards. This is a very convenient line of credit open to you, and credit card companies don’t usually care how you want to use the money. The advantage is that you can get the money you need immediately once you are approved, but keep in mind that the interest rate is higher than the usual bank rates. Your best bet here is to take advantage of teaser rates (usually zero per cent) and quickly accumulate enough work during that grace period. These grace periods always end, so you have to be as productive as possible during that time.
Signature loans. If you have a very good credit rating, then you can actually get an unsecured loan with nothing but your signature and your promise to pay back the loan. In this type of loan, you are borrowing money based on your reputation and history as a low credit risk. Some credit unions and even some banks may offer you an unsecured loan. If you do succeed in getting one, then you are to be congratulated, because usually the interest rates are not as high as what you would have to pay when you use your credit cards.
Peer-to-peer loans. There are websites that provide the means for investors to meet online with borrowers. You will have to post your loan request online, and hope that people who see it will help out. Some of the more notable websites are called crowdfunding websites, in which a “crowd” can contribute until you get the amount you need. The best ones for sub-contractors may include Crowdrise and Indiegogo, but you can do your own search online for the best crowdfunding sites.

As a future sub-contractor, part of your responsibility is to find enough jobs/contracts/projects to make a decent living. Getting unsecured loans for sub-contractors is a good test to see if you can make it on your own.

Unsecured Working Capital Lines of Credit

If you need working capital to make sure that your daily operations go smoothly, an alternative to loans is a line of credit. This is when you are allowed to borrow a certain amount of money, but you only take the money you really need and leave the rest in your credit line until such time you’ll need it. This saves you from having to pay interest on money you didn’t need or didn’t use. After all, why borrow $100,000 when you only need $50,000 for your working capital? Of course, it is even better if you can actually get unsecured working capital lines—meaning you don’t have to put up any asset as collateral.

Unsecured Bank Lines of Credit (UBLs)

Of all the working capital lines of credit a company can get, the unsecured bank line is perhaps the most sought after, and is also the most difficult to get. Most banks offer lines of credit, but very rarely do they offer them without asking for some form of security. The terms of these UBLs usually range from 1% to 6% above the prime rate.

The requirements for unsecured bank lines may differ depending on the bank, although there are some common requirements. All part owners with at least a 20% share of the company must have spectacular personal credit. The company must be in business for 2 years, although most banks may require companies to be in business for a lot longer. You may also need to have revenues ranging from $400K to $500K in your last taxable year.

Some industries are considered high risk, which makes them virtually ineligible for UBLs. These include real estate companies and retail shops. Restaurants are also considered high risk by banks, so much so that getting a bank loan or a line of credit for a restaurant is difficult even when you offer collateral.

Once you get your UBL, the line of credit cap is usually about ten to fifteen per cent of your gross revenues, and very rarely does the cap exceed $100,000.

Credit Cards

Credit cards are actually a form of unsecured lines of credit, and they can also be used for working capital. Credit card financing is a much more expensive than UBLs, but if you use them as unsecured working capital lines the right way you may be better off than not having them at all.

Here are some tips to keep in mind:

· Keep your business and personal credit separate. This helps you build your company’s credit rating, and it also doesn’t out your own personal credit rating at risk.

· Don’t use your credit card frequently. Excessive credit card use can have negative effects on your company’s business score, and that can hurt your future financing options.

· Try to get a lot of available credit. This protects you and your company, and it also gives you more options for obtaining financing.

· Your company’s credit rating is an asset, so make sure you take care of it just like any asset you have.

Factoring Loans for Construction Companies

Banks nowadays are getting a bit too anxious about who they lend money to. They tend to be hesitant about lending to various small business enterprises, and that includes construction companies. According to the US Small Business Administration, at least 74% of small business applications are turned down, and that may be a conservative estimate. The real figure may be as high as 90%. When a construction company needs a quick business loan to cover an emergency, banks loan procedures are generally too slow anyway, and that’s where factoring loans for construction companies come in.

How Factoring Works

In a factoring agreement, the construction company exchanges accounts receivable for immediate cash and the factoring company even takes the responsibility of collecting the debt from their clients. This frees the construction company from having to hire personnel to chase invoices, and its efforts can then be concentrated on the actual construction work. In a non-recourse factoring, the factoring company even takes the risk of non-payment—the construction company is not liable if their client refuses to pay.

Let’s take a situation in which a construction company has two weeks to come up with a payroll of $100,000, but the company doesn’t have the cash to cover it in time. However, the construction company does have a $200,000 invoice that will be paid up in a month’s time. For the sake of this example, let’s say that the construction company approached a factoring service that gives 75% upfront and charges a rate of 5% per month. So, with those terms, the construction company can then hand over the invoice to the factor so that it can get $150,000 in time to cover the payroll. Once the factor receives the payment from the client, the construction company then gets $45,000, while the factor takes $5,000.

Remember though that different factoring companies have varying rates and fees.

The Advantages of Factoring for Construction Companies

Factoring loans for construction companies offer a lot of benefits, such as:

1. The construction company saves money because they don’t need to hire personnel to collect money from their clients. This gives them the opportunity to focus all their attention and energy into actual construction work.

2. The infusion of cash is almost immediate. The approval rates for factoring loans are extremely high compared to traditional bank loans, and the procedure is short and efficient. The quick transfer of funds can be used for all manners of time-sensitive situations, from covering payroll or buying much needed supplies.

3. The interest rate for factoring is also much more reasonable than the rates demanded by credit card companies. Credit card companies impose high interest rates all the time and construction companies may also have to pay high late fees when missing a payment. In contrast, the percentage the factor receives from the invoices is fixed.

Essentially, construction companies that use credit cards for financing can face a lot of unforeseen problems which may only worsen their financial situation. With factoring, however, many problems that require a quick infusion of cash are addressed quickly and safely.

Sub-Contractor Business Loans

If you operate in the construction industry, you would know how difficult it is to be limited with the amount of working capital you have. It’s difficult to grow, and even more difficult to succeed when you don’t have enough funding. With subcontractor business loans however, you are given maximum flexibility and freedom to utilize the funds as needed, which is important in your line of business.

The construction industry is one of the biggest industries out there. According to the United States Census Bureau, the total value of the construction industry, in millions of dollars is 943,139. Additional statistics show that as time goes by, the value of each construction project (such as a house) increases. This means that the industry value increases as well. Clearly, the construction industry is a very lucrative industry to be in, but all subcontractors also know that being in the construction industry is tough.

Aside from facing stiff competition from other subcontractors and rising cost of raw materials, the projects are usually high value and take months to complete. Winning a contract means a great deal. In contrast, losing out on a contract bidding and not getting the next project of your current customer could mean a lot in terms of opportunity lost. The construction industry operates differently, and there are many financial challenges that they face. This is why sub-contractor business loans are available.

Special needs of subcontractors

A subcontractor faces additional challenges because of the nature of the industry and the nature of their role. These are some of the special needs that make being a subcontractor extra difficult:

1. Amount of Working Capital Needed

When you’re a subcontractor, you need to advance a huge amount of money to move the construction project. If you’re constructing a building for instance, the project won’t materialize unless you put in the needed working capital to buy the raw materials, pay for the labor, and fund all the expenses related to the project. This means the working capital you need at any give time far exceeds the usual working capital needed by other types of businesses.

2. Unique Timelines

In many cases, the client will only pay a subcontractor in full once the project is completed. This becomes a problem because you won’t have enough money to pay for your day to day expenses in the mean time. It’s a chicken-and-egg situation, because you can’t exactly wait for another contract to be completed just so you can start on a new one. If you want to really grow your business, you need to turn to financing and this is why Sub-contractor business loans exist.

3. Other Players to Consider

If you’re a subcontractor, you’re also usually not paid until the client pays the general contractor. This adds another layer of complication, because it means you’re not only relying on just one player. In addition to the actual client, you also need to think about the schedule and timelines of your general contractor.

Providing subcontractors with flexibility

If you operate in the construction industry, you would know how difficult it is to be limited with the amount of working capital you have. It’s difficult to grow, and even more difficult to succeed when you don’t have enough funding. With subcontractor business loans however, you are given maximum flexibility and freedom to utilize the funds as needed, which is important in your line of business.

How to Get an Unsecured Business Loan for Construction Contractors

There are certain businesses and industries that rely more heavily on working capital compared to others. Operating these types of businesses will necessitate putting up enough working capital to meet the needs of your customers, even if you need to wait weeks or even months before you get paid. A good example of this would be the construction industry. The nature of the industry alone means you need to have access to an unsecured business loan for construction contractors, at least if you want to survive and meet the demands of your market.

Working Capital for Construction Contractors

When you’re in the construction business, you take on projects. One project as a contractor could mean big bucks, but this project usually takes time to complete. You will need capital to secure the equipment, machinery, raw materials, and labor. Depending on your agreement with the client, the full payment could come at the end of the project, which means you will need to secure enough working capital from the start of the project until it is completed. If you don’t, then you won’t be able to finish it.

This is why getting access to an unsecured business loan for construction contractors is necessary. It could mean the difference between survival and failure of your business.

Bank Loans and Lines of Credit are Not the Ideal Solution

If you rely on traditional financing methods like going to a bank and applying for a credit line or a loan, you will need to go through a tedious process of proving your credit-worthiness and putting up collateral. Fortunately for you, there are actually many options available for those who need additional funding, and going beyond the traditional route could actually mean a faster processing time, less stringent requirements, and a lot of flexibility.

For instance, instead of having to put up a collateral, you could make use of your accounts receivable or other existing assets like inventory and purchase orders to be able to secure additional funds. As a result, you can take on more projects and increase your profits.

What You Need to Consider

But, even if you have access to an unsecured business loan for construction contractors, you have to consider several factors that could affect your financing agreement and your choice of lender.

First, you need to consider the maximum amount you can borrow, and what this loan will be tied to. You should also consider the flexibility of the loan, because it’s always better to have full control over how you will spend the money. The fees you will have to pay should also be considered of course, although depending on the financing method that you choose, this is usually just a percentage of the receivables you’re turning over to the lender.

If you are in need of additional business funds, do check out the business loan options offered by Neebo Capital. We have several financial solutions that cater to different industries and businesses, including construction contractors. Keep in mind that opportunities are harder to come by these days, and it absolutely makes no sense to lose projects just because you don’t have enough working capital. Get in touch with us and find out how we can help you!