Business Education

Small Businesses are Increasingly Turning to Alternative Lenders – Here’s What You Need to Know before Borrowing

Even before the collapse of Silicon Valley Bank or SVB, there was a tightening in the commercial credit market. Post-collapse, small businesses have found it increasingly more difficult to secure capital from traditional lenders. Still in need of cash infusions and lines of credit, small businesses are turning to alternative lenders.

Advantages and Disadvantages of Borrowing from Alternative Small Business Lenders

Alternative small business lenders are non-bank lenders that provide financing to small businesses. They offer a variety of loan products, including term loans, lines of credit, and equipment financing. Alternative lenders often have more flexible lending criteria than traditional banks, making them a good option for small businesses that may be turned down for a loan from a traditional lender.

Of course, even though all of this sounds good, there are reasons small businesses have historically relied on traditional lenders. This is due to the fact that there are not only upsides but also, downsides to using an alternative lender. So, let’s take a look at the pros and cons of borrowing from alternative lenders.

Pros of Borrowing from Alternative Lenders

Faster approval and funding. Alternative lenders often have a streamlined application process that can be completed online or over the phone. This can lead to faster approval and funding, which can be critical for businesses that need money quickly.
More flexible terms. Alternative lenders may be more willing to work with businesses that have less-than-perfect credit or that are in the early stages of growth. They may also be more willing to offer loans with longer terms or lower interest rates.
More options. Alternative lenders offer a wider variety of loan products than traditional banks. This includes term loans, lines of credit, and merchant cash advances.
No personal guarantee required. Some alternative lenders do not require a personal guarantee from the business owner. This means that the business owner’s personal assets are not at risk if the loan is not repaid.

Although these are some quite compelling reasons to seek out capital from an alternative lender, there are also a few considerations you should take into account so you have a better understanding of how these lenders work.

Cons of Borrowing from Alternative Lenders

Higher interest rates. Alternative lenders typically charge higher interest rates than traditional banks. This is because they are taking on more risk by lending to businesses that may not be as creditworthy.
Shorter terms. Alternative lenders often offer loans with shorter terms than traditional banks. This means that the business owner will have to make larger payments over a shorter period of time.
Hidden fees. Some alternative lenders charge hidden fees, such as origination fees or prepayment penalties. These fees can add to the overall cost of the loan.
Less customer service. Alternative lenders may have less customer service than traditional banks. This can make it difficult to get help if you have questions or problems with your loan.

Now you have a better idea of what to expect from alternative lenders, you are more informed about your options and this will give you additional choices. Taking it a step further, you should also consider the following if you are in need of a line of credit or some operating capital.

When to Borrow from an Alternative Lender

Alternative lenders can be a good option for small businesses that need money quickly, have less-than-perfect credit, or are in their early stages of growth. However, it is important to carefully consider the pros and cons before choosing an alternative lender.

If you are considering borrowing from an alternative lender, be sure to shop around and compare rates and terms from multiple lenders. You should also read the fine print carefully to understand all of the fees and conditions associated with the loan.

Interested in learning more about business? Then just visit Waters Business Consulting Group to learn more about us and the services we offer.

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Ways to Deal with Employee Theft

May 24, 2017 No Comments

One of the most unappealing things about managing a workplace is having to deal with ugly situations. Employee theft, or, internal theft is perhaps the single worst scenario to encounter because often times, you won’t know the extent of it, at least, right away. This behavior can take shape in a number of ways, including fudging clock-in and clock-out times, taking supplies without permission, or, even stealing money. While the latter might get your heightened attention, it’s the more subtle that can go on for much longer periods and cost more in losses. Ways to Deal with Employee Theft Make no mistake about it, internal theft is a huge problem in the United States. However, it is difficult to gauge because so much of it goes unreported due to embarrassed or recalcitrant employers. The average estimate ranges widely from $20 to $50 billion per year, with Fortune reporting in the retail sector alone, a whopping $32 billion was lost in 2014, with an amazing 34.5 percent of that being attributed to employee theft. Only shoplifting outpaced it, accounting for 38 percent. Whether it’s downloading and sharing company confidential information (a hot topic these days), manipulating expense reports, or stealing merchandise- employee theft and fraud is a serious issue for business owners. In fact, studies show that occupational fraud now results in the loss of five percent of an organization’s annual revenue. —U.S. Small Business Administration While it’s an unpleasant experience to-be-sure, it nonetheless exists, and, in practically every workplace. The level, though, might be very minute, like the employee who occasionally takes a few postage stamps for personal use. When it comes to bigger issues, it’s not unusual for the owner and/or manager to be taken by surprise. After all, you do what you can to screen and interview every new hire, but sometimes, it’s not enough. The primary reason for this is a simple necessity, especially for small business owners who need to delegate responsibilities. They just don’t have the time to do it all on their own, so, they leave certain things to employees. This creates an atmosphere of opportunity where trust can be easily breached. When that happens, here are some ways to deal with employee theft: Evaluate the situation. When you discover the problem, it’s best not to jump to conclusions about the scope. It could just be a case of miscommunication or simply a lack of judgment. If you believe it to be serious and particularly one that’s ongoing, you should commit to take action. If it’s minor, you might consider issuing a written warning, placing him or her on probation, or, repayment. Document everything you can. If you discover supplies, inventory, materials, or money is missing, do everything you can to document what it is, when it happened, and it’s worth. You should gather as much evidence as you can to bring the situation to resolve. Phone your attorney or HR Consultant immediately. Dealing with internal theft is a serious matter and you don’t want to overstep your legal bounds. While you certainly have rights, you cannot afford to act in a rash manner. Call your lawyer and ask about what options are available to you. Call the local police or sheriff’s department. If your legal counsel instructs you to contact the local authorities on their non-emergency line, you should do so right away. While this won’t likely resolve the issue immediately, it will be a step in the right direction. Get in touch with your insurer. Another one of the first phone calls you should make is to your insurer to learn exactly what coverage you have in-place. You might have to file a claim to recover most or a portion of your loss. Once the initial work is done, consider how you’ll deal with preventing the same problem from occurring in the future. You should also discuss the matter with key team members and think seriously about how to present the issue and your reaction to others in your business. As a Leader, it is important that you don’t allow this to become office gossip, get out in front of it, and demonstrate your commitment to your company and how you reward good work and the consequences for theft. Want to find out about what a business coach can do for you? [shareaholic app=”follow_buttons” id=”26833294″]

What to Do with an Unwanted Inherited Business

September 16, 2021 No Comments

Owning a business is not something that everyone aspires to do. Sure, many people like the idea of being their own boss. But, there are definitely individuals who prefer to avoid the stress and anxiety of being an entrepreneur. Of course, there are many different sets of circumstances. For instance, children who follow their parents and run the family business, taking it over after their parents retire. Or, people who unintentionally fall into their own business without actually setting out to do so. For example, someone who inherits a business from a relative. Although this might seem a bit far-fetched, it does happen more often than one would think. So, what options are available to an heir who really does not want to take over the business? Types of Inherited Businesses Probably the most common form of an inherited business is a family company. Usually, the children grow up in and around the operation and are at least familiar with it. Other times, the children aspire to follow their own career path and never work in the organization. Additionally, there are heirs who inherit a family-owned business that they have never really been acquainted with whatsoever. If you’ve inherited a company, there might be a lot of questions on your mind. You might not want to be an entrepreneur, or even if you do, you might prefer to work in a different industry. Even if you’re ready to take on the business, you might be unsure about how to deal with current employees and suppliers. —Nerd Wallet Though these circumstances are far less common, they do occur. One prime example is someone who inherits a commercial property. That property is leased by several other businesses and generates a profit. The owners may not even be directly involved with the day-to-day operation and rely on a firm or individual to handle the necessities. These would include things like maintenance, repairs, negotiating leases, upgrades, and more. What to Do with an Unwanted Inherited Business Your first instinct could be to just sell it and be out of the situation as quickly as possible. But, if it’s generating a consistent profit, that might not be a wise idea. On the other hand, even if it does generate a profit and you’re completely unfamiliar with it, it could turn into a gigantic mess. Here are some possible options to explore: Learn about the business. Regardless if you’re set on selling it or remotely considering taking it over, you’ve got to know what you’re dealing with first. It’s imperative that you educate yourself about the business in order to make an informed decision as to which way to go. Don’t make the mistake of letting your emotions take over. Instead, take at least a little time to understand precisely what it is and more importantly, how much it’s really worth. Consider being an absentee owner. Although this is quite common in the business world, it’s always a risky proposition. And, it’s probably why you don’t want to get involved in the first place. If you let other people run it, you’re putting your trust into others and that could easily lead to a very regrettable set of circumstances. However, if it is something like commercial property and your relative was also an absentee owner, at least give it some serious thought. Invest in the business. If you do want to give it a try, don’t go it alone. Bring in a business coach to guide you through the process of taking on an entrepreneurial role and become familiar with all it takes to head up this type of operation. If you find it isn’t a good fit, you can always sell it and move on. What other suggestions would you give someone in this position? Please take a moment to share your thoughts and experiences so others can benefit from your perspective! Interested in learning more about business? Then just visit Waters Business Consulting Group.

Why Hosting Thanksgiving Dinner Teaches Us a Great Business Lesson

December 11, 2017 No Comments

Yes; you read the title correctly, hosting Thanksgiving dinner can teach us a very good business lesson. How; you might ask? Well, think about it this way. When Thanksgiving rolls around and you’re hosting dinner, what’s one of the first concerns which goes off in your head? Of course, being anxious about getting the meal cooked right is one. But, equal to that is how much of a mess your home is! You begin to panic. It’s a total mess. Things are everywhere. The floor is dirty. And, you notice just how cluttered it is. Time to do some serious cleaning and organizing. Why Hosting Thanksgiving Dinner Teaches Us a Great Business Lesson It’s a known fact that where you work affects just how you work. For example, if you worked in a chaotic environment, like an elementary classroom, you’d have little choice but to stay well-organized. However, too many business professionals let their workplace become disorganized. And, it causes needless wasting of time. So you’ve got a messy office you’d like to tame. We’ve all been there, and many of us still are there. You may think that the people behind your favorite productivity and organization blogs are immune to such things like clutter and disorganization, but more often than not we’re brimming with organization tips, tricks, and solutions because of our own struggles with disorganization. —Lifehacker.com Now, you might disagree. There are people who believe a messy workplace doesn’t really matter at all. But, it actually does. Organization is a key factor. It’s particularly integral to success. Without organization, there’s too many loose ends. Those can easily become distractions. Or worse, cause serious problems. How to Do Office Organization Right When you ignore disorganization, it inevitably comes back to bite you. It’s a quasi-blind spot. A well-organized workplace has big advantages. First and foremost, it gives you a genuine feeling of control and competence. That directly translates into improved and increased productivity. Second, because it’s organized, you’re more free of pointless or counterproductive distractions. Third, it allows you to put your focus where it bests serves your interests. So, let’s look at how to do office organization right: Purge with purpose. The first step is to get rid of as much junk and useless stuff as possible. Purge everything that’s unnecessary or unusable. Take this seriously and you’ll feel an instant sense of gratification. You’ll also be amazed how much space you free up. Designate catch-it spaces. There are all kinds of things that come into a workspace, be it an office, a workshop, or retail store. So, designate where that stuff goes. For instance, a place for things like an umbrella, bags or briefcases. As well as a place for incoming documents and other things. Basically, live the phrase, “A place for everything and everything in its place.” Keep your workspace clutter free. The single best way to stay organized is to keep clutter away. Don’t ignore junk, things, and stuff that come into your workspace or you’ll fall right back into the same cycle. Keep it free of clutter and you’ll develop a good habit. Prioritize and always act accordingly. Another good habit to develop is prioritizing. It’s a great way to know what’s next and what can wait. A shotgun approach is a sure-fire way to disorganization and confusion. Plus, you’re unlikely to get very much done. How do you deal with junk and get organized? Have you found you’re more productive when your office is neatly organized? Please share your thoughts and experiences by commenting! Interested in learning more about business? Then just visit Waters Business Consulting Group.