Stratacus Business Advisors 718 - 673-3982
"The best laid plans of mice and men", Even when you have thought things through something may still go wrong. In light of this, it is imperative that there is a plan of action with controlled systems in place to protect and supplement your business from unforeseen events, thus creating a fail-safe environment which can isolate catastrophic financial disturbances. Knowledge, preparation and proper execution are the key factors involved. Let us provide you with peace of mind that will lead to a successful outcome.
No two situations are alike – as such, each client project is conducted through a complete evaluation and analysis that includes research to develop, define and support a comprehensive business model that drives revenue and sustains growth using a series of decisive propriety performance formulas and strategic operational methods that deliver real world results.
Client Services:
Small Business – Start-Ups
Mid-Size Business
Our Specialized Training:
Business Lending Alternatives:
With dramatic changes in the banking sector, it has become increasing difficult for businesses' to secure traditional lines of credit. Maintaining a healthy cash flow is one of the most vital aspects of any business. Small and medium sized enterprises (SME's), a large part of the US market for banks, are particularly vulnerable to late payment and bad debt. These companies often finance customer's late payments to the detriment of their own cash flow and business development.
Through the use of non-recourse accounts receivable finance, also known as factoring, the risk is removed should one of your buyers slow pay, fail to pay become insolvent or bankrupt. Using this type of approach businesses' can safely convert their receivables into immediate funds instead of waiting for payment when receivables are due.
Growing companies can finance expansion, take advantage of supplier discounts, potentially leverage their bank credit facilities, reduce balance sheet liability and even build or strengthen the business rating with reporting agencies like D&B, Experian and Equifax.
Another concept is asset-based lending where inventory, receivables, equipment and machinery are used to secure funding. Of course this is accompanied by high rates of interest and the caveat that if repayment is not made, or terms in the agreement are not met, the bank or lender can move to seize the company's collateral. When the lender initially approves funding they file a lien with the State called a UCC (Uniform Commercial Code) taking first position to protect itself in court.
For businesses such as wholesalers, distributors, manufacturers, logistics and service related sectors, the most import asset you have is your accounts receivable. Your should never take this for granted. Do not assume that you know your customers because they have always paid you on time. This is the biggest mistake you will ever make, and the one that can bring your company to its knees very quickly. In just one day, a business can go belly up due to the insolvency or bankruptcy of one of its crucial A-List buyers, which may well be a publicly traded company. It happens all the time, and continues to occur as we see a deterioration of our domestic and global economies.
In order to realize exponential sales growth, you need to offer terms to your buyers whether domestically or internationally. This means taking on risk, but the actual reward equals more revenue. The more your company makes, the more it can grow. This is the holy grail of your existence, and you must protect this from losses due to insolvency and bankruptcy outside of traditional methods like commercial collections. There is a simple answer, and it's called, trade credit insurance. The concept is the same as if you were to insure your building, equipment and vehicles.
Trade Credit Insurance:
The cost effective way of protecting a business with little to no cash flow issues is the use of trade credit receivables insurance, which can protect from catastrophic losses due to insolvencies, past due invoices, and bankruptcies. This allows you to safely ship more goods and provide additional services to your customers. In fact, with exception to disputes and fraud, if your business carries a trade credit insurance policy, should you experience slow paying invoices you may save the cost of recovery fees by more than a third of what law firms may charge to collect an outstanding debt while significantly reducing your back office expenses.
Moreover, having a policy comes with credit decision reporting, which will enhance your ability to focus on profitable business verses dealing with the liability of bad debt and waste of manpower.
One of the significant perks of having a trade credit insurance policy is being able to leverage your bank's lending relationship. Outside the United States having a trade receivables insurance policy has become practically necessary for businesses' that want to establish credit facilities, (AKA) revolving line of credit or working capital.
The United States banking institutions continue to hold tightly to their balance sheets while cherry picking the best of the best companies to conduct lending relationships with. It appears that American banks have come to realize the great importance of trade credit receivables insurance when considering a company's request for a line of credit. The purpose is that, the bank can be named as loss payee/beneficiary should a businesses' net term invoices whether domestic or export end up as insolvent or bankrupt due to catastrophic loss. This gives the financial institution peace of mind knowing they will be paid.
We are licensed property and casualty brokers, and can assist your company with any questions you may have regarding trade receivables insurance or other commercial related matters, and provide you with a no obligation quote. Feel free to give us a call to answer any of your questions and discuss how we can assist you. Our operational hours are Monday - Friday 9AM to 5PM EST.