by abundantadmin | Nov 8, 2022 | Blog-Finance
Business owners should consider their supply chain and its effect on their business model. Building a business that supports minority- and women-owned businesses is important to your customers. Your customers need to be aware that you are committed to supporting demographically diverse vendors. One of the most effective ways to do this is to implement a Supplier Diversity Program.
What Is a Supplier Diversity Program?
This program is a strategy designed to recruit and utilize minority-owned businesses for your supply needs. These companies can be any combination of women-owned businesses or any enterprise identified as a small business by SBA. These potential suppliers employ over 12 million people according to a report by Dun & Bradstreet. By focusing on contracting with these vendors, your business makes a significant impact on these businesses and their employees.
How Do I Establish a Program?
Before you create your Supplier Diversity Department, evaluate your current supply chain. You may already have established contracts with many minority-owned vendors. After you establish your baseline, contact SBA to determine what percentage of qualified vendors are in your industry.
With the above information, you can create a strategic plan to improve your vendor diversity. Be sure to modify your mission statement to reflect your goals. The most successful Supplier Diversity Programs begin with a top-down implementation. Ask employees, customers, and business partners for recommendations.
How Should I Monitor the Program?
Many business owners hire a Supplier Diversity Manager to manage the program. They help identify categories you may not have considered – women-owned businesses, disabled veteran-owned businesses, or LGBT-owned businesses. Managers can also work with suppliers to complete necessary forms that identify them as minority-owned suppliers. These forms help you meet your goals.
As the business owner, you should establish standards your company will achieve. Keep these things in mind as you evaluate your program:
- New businesses should incorporate supplier diversity as a primary business objective. Building your business based on this goal helps all employees understand your commitment from day one.
- For established business owners, communication regarding this new strategy should come from you. Work with individuals or small teams to make sure everyone understands the policy and how it will benefit the company.
- Maintain a system that details and evaluates your vendor guidelines. Ensure that your team is working with strong vendors that provide quality products on your timeline.
- Meet with vendors to see what other needs they may have. You can help strengthen both your and the vendor’s business network.
Building a Supplier Diversity Department will help establish your business as a forerunner in your industry. Your customers, vendors, and employees will see your commitment to embracing diversity and improving your brand reputation.
by abundantadmin | Nov 1, 2022 | Blog-Finance
Investing in commercial real estate is a common tactic for companies looking to grow. Buildings work as both investments and operational facilities, allowing you to reduce lease overhead while gaining an asset that can be refinanced or sold as needed to further your company’s interests. Many businesses eventually invest in commercial property outside of just operational facilities as well, either for secondary income or as a speculative asset. Depending on your reasons for purchasing, you may want to consider a loan from the Small Business Administration.
SBA Loans for Commercial Properties
The SBA has two loan programs that allow for property purchases. The 7a program allows companies to purchase property to be used as operational facilities, with some allowance for partial use as income property if that is a minority of the purchase’s purpose by square foot. The 504 program also allows you to purchase commercial buildings, but it is a multi-asset loan, so you can also use it to finance equipment. The fact that it can finance all the assets needed for a startup to begin operating is why it is so popular, but it is also why it is not useful for businesses seeking to buy investment properties beyond those needed for their own operations.
Commercial Mortgages from Banks and Private Lenders
If you are looking for a low overhead, long-term loan to buy a property for your small business and you do not qualify for SBA loans because it is for investment purposes only, you can probably still finance it with a traditional commercial real estate loan. Commercial mortgages have lower LTVs than residential ones and slightly shorter terms, but you can still find 60-70% LTV on 20-year loan terms, which is more than sufficient for most long-term investment properties, especially income properties.
If you are buying a commercial property that is more valuable than the SBA program can accommodate or your business income is outside its criteria, commercial mortgages are also a great way to finance your operational property investment as well. They offer some of the lowest loan rates you will find for assets in general, and there are no prepayment penalties if you decide you have the reserve capital to own your commercial property outright before the loan amortizes. The best part is that as you accrue equity from the property value appreciating and the loan is paid down, you can use it as a source of low-cost financing via a credit line or bridge loan.
Contact Abundant Wealth Financial today to start exploring our commercial real estate financing programs. Our team will work with you directly to create a tailored solution to help you reach your goals.
by abundantadmin | Oct 25, 2022 | Blog-Finance
Many people know about the Small Business Administration’s flagship loan programs because they have been operating for decades, refining and expanding their criteria over time to accommodate issues like franchise financing and changing definitions of small business income. What is less well-known is the wide range of additional programs offered for everything from credit building to disaster relief.
Over the last 15 years, several loan types have emerged, including microloans for short-term business needs, but many of them are niche programs compared to SBA loans for major asset purchases. Two of the more important newer loan types for startups and companies with limited resources have been around since 2018, though, and it’s important that the companies who could benefit from them learn about what they can do.
Community Advantage Loans
This program was piloted in 2018 and was designed to connect borrowers with credit obstacles to 7a program lenders by providing both application support and additional lender guarantees. When you work with the Community Advantage program, you aren’t necessarily applying for a new type of loan, but for help accessing the loan types that other businesses have benefited from. If you have been turned away through the traditional 7a program for issues with your business plan or supporting documentation, this could be your path to approval as well.
Express Bridge Loans
While the SBA is most well-known for its long-term lending, the administration has worked on making short-term lending more accessible. The microloan program is one version of this initiative, and express bridge loans are another. Where traditional SBA loans often have long approval times due to the dual approval process by the government and lender, the EBL program is designed for fast approvals.
The EBL application process is designed to identify your financial needs and the ways they have been impacted by recent disasters. It is vital to many companies’ disaster recovery efforts because Express Lenders approved by the SBA can move quickly based on application information, but your business does have to be operating in a disaster zone to qualify. Even if it is not an everyday loan you can always use, companies that operate in disaster-prone areas should consider it as part of a response plan.
Learn More About Additional SBA Loans
If you are interested in finding out about the half dozen or so additional programs beyond the SBA’s flagship offerings, all you have to do is check out the administration’s official web page. You will find resources on everything from which franchises work with the SBA to what approval times average for different programs.
Abundant Wealth Financial offers a wide range of SBA solutions for working capital, equipment, large business assets, acquisitions, and more. As a financial firm in good standing, we have the ability to expedite loan requests for our clients. Contact our offices today to get the funding your business needs.
by abundantadmin | Oct 18, 2022 | Blog-Finance
Flipping homes has gained a lot of popularity and attention over the years. The ease and viability of these projects are often inflated by depictions on television and social media. If you want to keep this from turning into your worst nightmare, here are five pitfalls you’ll want to avoid if you want to get into the home-flipping game.
Underestimating the Size and Scope of the Project
A Fix and flip project is often a far more arduous undertaking than many people realize. While social media and television may give you a false sense of timeline and assurance, you must understand that investment properties take a significant amount of time, energy, money, and patience.
Waiting to Explore Your Financial Options
Fix and flipping homes require different financial backing than it would for your primary residence. You will want a reliable lender who offers loans for flipping projects or hard money loans. Waiting to the last minute can produce poorly informed options and loans with unappealing terms.
Assuming You Can Do it on Your Own
Many potential home flippers are surprised to learn how aggressive the housing market is and how many options there are. If you try to embark on this journey on your own, you are bound to fail. You need a knowledgeable real estate agent to help you navigate the stressful process of finding the right property. They will not only negotiate your deal, but their expertise can prove invaluable in locating the right property to flip.
Lacking an Understanding of the Housing Market
Doing your research is also a must. Don’t rely solely on your real estate agent. While they will be an essential partner in your process, you should also understand the trends in the housing market to give you your best chance at turning a profit. Timing your fix and flip project correctly will play a pivotal role in the resale and profit of the overall process.
Relying on a Single Contractor
If you are going to make flipping homes a habit, you need more than one contractor in your arsenal. Contractors can often be incredibly busy, especially during months with more temperate weather. By relying on a single contractor, you can all too easily find yourself stuck in the flipping process with little leeway. If you want to avoid unnecessary and costly delays, you need more than one contractor.
Fix and flip properties are often not the silver bullet in your financial portfolio; however, they can prove to be far more successful and profitable if you avoid these all-too-common pitfalls. Don’t let the flipping process get the best of you. Instead, set yourself up for the most successful process you can.
Abundant Wealth Financial provides financing solutions designed specifically for property flippers. Contact our offices today to learn more about our fix and flip loans, as well as our fix and flip lines of credit.
by abundantadmin | Oct 11, 2022 | Blog-Finance
When your business needs new equipment, you have a few different options. You can lease it, get a loan or buy it outright. While there are certain situations in which owning your equipment may be the better choice, there are several benefits to equipment leasing.
1. Lower Upfront Payment
Buying equipment outright can put a dent in your company’s savings and, even with a loan, you may need to make a downpayment. With leasing, this is not usually the case. Most often, you are only required to make your monthly payments which can reduce the financial burden on your business.
2. No Added Debt
A lease is a rental agreement and, because you are not taking out a loan, there is nothing to pay back. This means that there are no interest fees to worry about, and it won’t affect your credit-to-debt ratio.
3. Easier Upgrades and Replacements
Depending on the kind of equipment your business uses, you may find that it quickly becomes outdated. If this is the case, then equipment leasing is likely a much better option for you than purchasing. With a lease, you are only required to keep the equipment for the length of the agreement; after this, you can switch it out for something more recent.
4. Included Repair Costs
Even if the equipment is not something that will become obsolete quickly, that does not mean it will last forever. As it ages, your equipment will likely start having issues and require repairs more often. If you own it, then this work will come out of your own money. With a lease, repairs are often included. This makes it easier for you to get the necessary work done and reduces the need for emergency spending.
5. Lower Tax Payments
You probably already know that you can claim business expenses on your taxes. This includes your lease payments. Because these payments are the same every month, it makes it easier for you to prepare. In comparison, the amount that you can claim for equipment you own will lessen as the value goes down over time.
Equipment is an essential asset for any business. From furniture to computers to large machinery, these items are necessary for you to run your company on a day-to-day basis. Equipment leasing can simplify the process of getting what you need and is often a more convenient option compared to applying for a loan. If you don’t want to increase your debt or the technology you use is continually improving, then a lease may be the way to go. Contact Abundant Wealth Financial today to explore our equipment financing options.
by abundantadmin | Oct 4, 2022 | Blog-Finance
Is your small business lacking a bit when it comes to money? It can be stressful when you feel as though you don’t have the funds to operate your business properly, but there are some things you can do to make the situation easier. Even with a tight budget, you can still grow and create a successful business.
1. Keep Track Of Your Monthly Finances
One of the most important things for any business is to keep track of your money. You need to know how much you’re making and how much you’re spending each month. When you do this, you have a better idea of any extra funds you may have and will know what you can spare if there is an emergency or useful investment opportunity.
2. Use Low-Cost Marketing
Many forms of advertisement require money. Some cost less than others, and some won’t cost you a thing. With the rise of social media, many businesses have chosen to create their own accounts to interact with consumers and reach a larger audience. You can hire someone to operate an account for you or you can keep costs down by doing it yourself.
3. Reduce Unnecessary Expenses
If you notice that you are spending too much in certain areas, cutting back on these can make room in your budget. Whether it’s equipment that you no longer use or a workspace that is too large for your needs, cut out anything that isn’t necessary. You can also work with lenders to refinance any loans you may have to reduce interest rates or improve your terms.
4. Apply For Credit
While it may not necessarily put money in your pocket, having a business credit card or line of credit can be incredibly useful to your company. You will eventually need to pay it back, but it can help you get through a difficult financial period with a bit less stress. If you do a good job of making your payments on time or early, it can also improve your credit score and make it easier to get a loan or other financing in the future. Be careful, however, that you don’t spend more than you will be able to pay back as this can have the opposite effect.
Trying to stick to a budget when you don’t have much money can be difficult, but there are steps you can take to reduce your spending. Cut unnecessary costs where you can and keep an eye on your finances to make sure you know where your money is going and how much you have.
Abundant Wealth Financial offers unsecured lines of credit to both established and new businesses. Contact our offices today to get the financing you need.