Free Business Finance Software

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Small and medium enterprises face most of their difficulties when they start to manage their cash flows and financing decisions. The characteristics of SMEs around the globe, is a single operator of the business. And this individual in most cases specializes on the core skills and masters the value programs for the SMEs operating at specialized niche level. But he/she lacks proper financial knowledge. To aid and help these people now-a-days several organizations have started to distribute free business finance software over the internet. This software allows them to structure their cash flows in proper accounting or financial reporting format after analysis. Reports thus generated with the use of this software help the business to flourish.

The need of using free business finance software on a SME context is immense. Financing is among the core functions of any business activity. These software programs provide a structure and govern all the financing activities in light of an equilibrium situation where optimizations of resources are main objective and help to identify the breakeven point. This software helps in the following areas of a business and following are the advantages of using it:

I. managing cash flows
II. analyzing business growth
III. budgeting
IV. investment analysis
V. report generation
VI. record keeping
VII. providing right information
VIII. expediting decision making process
IX. managing inventory
X. cost analysis

To derive the complete advantage of the free software, the user needs to have preliminary idea of several financing terms and analytic skills of financial reports. It is a tool to conduct better business irrespective of the industry. The most amazing aspect is that this software is at present available for specified industry. The embedded information is the stored data and terms used in specific industry.

As nothing comes in free in this world there are also some limitations to this free finance software as below:

I. most of this software is developed in the context of different economies
II. most of the analysis programmed are from various finance school of thought and the analysis are done on various methods rather than widely used ones
III. this finance software are for free distribution over the internet only, you can not get a copy from a software seller
IV. corrupted or mal ware are often downloaded along with these free business software
V. advertisements are programmed with such business finance software that suddenly covers the computer screen and affects smooth functioning of the operations
VI. users are asked to go through the ‘read me’ files for instructions on how to use the software, but these instructions or user manuals rarely include graphical images for clear understanding
VII. requires regular update on some cases
VIII. have limited access in terms of time and mostly the demo version of this software are distributed over the internet as free software.

The software has certain demerits along with risk of information security. It is not wise for a businessman to totally rely on his finance software. In fact it will be no wonder if users of such business package start to see their secret information, credit card details, and important password are used and thus his online incomes starts to vanish in the air or pirated online. Security has to be the main concern before using free business finance package and checking whether it is from a certified developer.

With growing need for a true and perfect helpful business package, we believe soon world reputed developers will bring only such software for free distribution, which will overcome all the disputes and debates.

One Real Way To Solve Business Financing Challenges – Asset Backed Lending

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Something that works. We all want that. And in the new business financing reality of 2010 and 2011 asset backed lending might be your new choice for Canadian business financing.

Asset based line of credit facilities are becoming more popular everyday. It is simply a newer method of lending to Canadian business with a total focus on assets. ‘Assets’. That’s the key word. So which assets are they? ask clients. Typically these include inventory, receivables machinery and equipment in your fixed assets part of the balance sheet, and in some cases real estate. In some very unique cases IP, or intellectual property, a la patents, etc can be financed.

Another new common category is tax credits, such as SR ED (SR&ED) tax credits. Tax credits are in effect receivables, money owing to you from the government that is in the form of a non repayable type grant. So monetizing that asset as soon as you can allows you to employ cash more efficiently in your business.

Our clients typically imagine inventory and receivables as being the only items they could margin for liquidity with their bank. The reality is that even inventory financing is becoming more difficult in the chartered bank environment, certainly for start up, smaller, and medium sized firms. That therefore is the main difference in an asset backed lending and working capital facility; in its simplest form it’s simply the margining of all those other assets to capture maximum liquidity.

So who is actually using these types of cash flow facilities, and why are they a very solid alternative to what is termed ‘ traditional’ bank financing. (We’re not so sure these days that ‘ traditional’ bank financing is as available as it used to be – what do you think?!)

The truth is that this type of Canadian business financing is an alternative to bank financing, its real, its available, and allows you to not having to consider more unpalatable options such as raising new equity and diluting your ownership.

We are all for secured bank lending… if you firm can qualify for all the lending it needs. But if you have had financial challenges then consider asset backed lending as a solid option. What are some of those ‘ challenges’ we speak of that might not allow you get Canadian chartered bank financing… its issues such as a temporary loss, a turnaround, new ownership, balance sheet ratios and covenants that might not work for the bank, etc.

Asset based finance does not really care about all those issues – yes they are discussed, but it always comes back to ‘ the assets ‘ – and if you have them you can margin them on a daily basis for working capital and cash flow.

So whats the catch. While we feel the advantages of asset based lines of credit far outweigh the alternatives, the reality is that 95% of the time this type of financing is more expensive. It also requires more reporting on an ongoing basis, although most business owners we talk to will gladly pay more finance charges and are OK with reporting if they in fact have all the cash flow they need to grow and profit in today’s competitive environment. You can also expect a bit more due diligence on your overall asset quality when you set up the facility.

There is always a bottom line in business, and in our case today it’s that an asset backed line of credit facility is a new and emerging working capital financing that provides your firm with all the liquidity to grow. Speak to a credible, experienced and trusted Canadian business financing advisor to determine if this type of working capital and credit facility benefits your firm.

The Different Forms Of Small Business Finance

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Any small business owner in operation today is actually an incredible and solid form of business ownership as well as being an integral part of the growth and health of the economy. Quite often, when public policy and economic decision making is undergone, they look at small businesses to see how they are faring and able to withstand the various different amounts of strain and tensions that the economy is being placed under. An incredible stress of any business is the financing options available to them which requires the knowledge of the various types of small business finance.

With any level of business financing, there are actually an incredible amount of options available that provide an incredible source of financing overall. Businesses must keep a very close eye on their options at all times in order to remain competitive and thing strategically regarding how they are able to move forward. Thus, understanding what all options are at all times is definitely a crucial element in this process.

Truly, at all times, any small business must maintain a solid grip on their cash flow. Being a good cash manage is often crucial for maintaining a level of financial well being as well as not having to depend as much on financing at all. Thus, this should always be a foundational business model process.

Debt financing is actually an incredible common form of small business finance available. Basically, this is where the finance company purchases the debt acquired by the business in exchange for repayment with interest. This is often performed at early stages of any small business.

For those that need more cash flow, business loans are actually often a very common source of business financing. This is basically much like a personal loan and requires a solid credit standing as well as an incredible amount of potential. This should actually be something that is reserved for the harshest of economic times for any business.

Investment in any business is also another incredibly common form of small business finance. Basically, this is something that involves a great deal of word or mouth and branding before it is offered to any company. Most businesses use this investment cash for expansion and upgrades to help the business grow and run efficiently over time.

Another form of business finance is through equity finance. Most often, this type of funding requires a decent level of credit standing as well as a very solid forecast of growth and potential to attract equity financiers. In this process, the business owner relinquishes a level of their ownership in the company in exchange for a set amount of financing that requires repayment and constant reporting to the equity finance company.

Finally, venture capital is often used as business finance for those wishing to take their business to the next level. This is acquired when a business is beginning the process of going public and wishing to sell themselves to the market. This funding is often used to increase the overall financial outlook of the company to make it more attractive.

Buying a Business – Understanding Small Business Financing

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As a business broker I am frequently discussing with clients and prospective buyers methods of small business financing. Once a buyer and seller agree on price and terms, it all boils down to due diligence and financing.

A lot of factors can determine how lenders will view your deal. It will depend on the type of lender, type of business, and what kind of assets does the business own that can be used as collateral. Is there real estate involved in the transaction?

A commercial banker or loan broker will show you what factors matter most and get your deal funded with their products.

Cash and Equity

Of course, if you’re paying all cash, none of this is your concern, however 100% cash deals are not the norm.

Every business is unique and different, but one thing is certain before you seriously consider pursuing a business for sale: You or one of your partners will need sufficient liquid capital or equity for anyone to finance your deal.

Bank Financing

The stories of a “no money down” deals and 90% seller financing are rare and I have personally never seen one that was legitimate.

Again, depending on various factors, when acquiring small business financing through a commercial lender, there is a good chance you’ll need 20-40% cash/equity down on the business, financing the balance with debt capital.

You will probably pay “prime + 2″ in interest, meaning if the prime rate is 8%, your interest will probably pay 10%.

The term of the loan will probably be 5-10 years. Many of the commercial loans I’ve seen are 7 year terms.

Business with Real Estate

If you are acquiring real estate in addition to the business, many products are available as “Blended Loans”. These loans are “blended” with the standard “real estate loan” (10% down, 30 years).

You end up with roughly a 15% down payment, and a term of 18 – 22 years, which is great for keeping your debt service down and increasing your Cash Flow.

On the other hand, 15% of business and real estate can still be a sizable down payment.

The cost on the “blended loan” will likely be more favorable as well with the real estate as collateral.

Seller Financing

Most small and mid size companies will involve a portion of seller financing.

It is appropriate to amortize the financing over a period of time and have a balloon after 2 or 3 years.

This way the financing serves two purposes: Funds the deal and shows that the seller has confidence in the business – and the buyer.

Business Finance And Choosing the Right One

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One of the main reasons as to why new business ventures fail is due to a lack of financial funding to get the business venture off the ground. Many people don’t realise how much opening and running a business actually costs. If you don’t research and seek out business finance you will be unable to pay for your business premises, all of your necessary equipment, your bills and your staff wages as well as any of the stock that you will need.

You also need to ensure that when you decide on your business finance that you choose the one that is best for your business. Finance comes in many different forms and can be split into two main sections; equity finance and debt finance. The definition of equity finance is money that is invested into your business that doesn’t need to be repaid. This money is yours to use in return for a share of your business profit. As well as getting money invested into your business with equity finance you will also gain expertise and business contacts that are yours to use. The second main type of business finance is debt finance. This is money that is loaned to you. It is money that requires the need to be repaid over an agreed amount of time. You will have to repay the loan in full with added interest but no percentage of your shares are handed over.

Some examples of equity finance include business angels; these are entrepreneurs who invest a certain amount of money into your business. In return for the money that is invested a business angel will gain some of your shares so that they get a percentage of your profit. Business angels are perfect for start-up businesses as they provide money that doesn’t require the need to be repaid as well as expert advice about the best way of running your business. Another example of equity finance comes in the form of a venture capitalist. A venture capitalist is virtually the same as a business angel apart from they can provide higher amounts of finance and tend to invest more in established businesses where the risk of failure is reduced.

Some example of debt finance include; bank loans. When most people think of start up business finance the first place that comes to mind is their bank even though banks are very weary about lending money to new businesses as there is fear that the monthly repayments will not be kept up-to-date. Another example is credit cards; these are expensive when it comes to start-up finance but they are also a quick way of raising finance. One more example of debt finance is overdrafts; these can be expensive but are a flexible form of borrowing, they are not suitable for long term finance and are repayable on demand.

Although with debt finance you have a lot more options open to you with ways of lending money, the option of equity finance is still more favourable with new businesses as a private investor will do everything that they can to ensure that your business is a success.

Small Business Financing Options – Despite the Credit Crunch

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There’s no question that the financial crisis and ensuing credit crunch have made it more difficult than ever to secure small business financing and raise capital. This is especially true for fast-growth companies, which tend to consume more resources in order to feed their growth. If they aren’t careful, they can literally grow themselves right out of business.

Amidst all the gloom and doom, however, it’s important to keep one thing in mind: There are still options available for small business financing. It’s simply a matter of knowing where to look and how to prepare.

Where to Look

There are three main sources you can turn to for small business financing:

Commercial Banks – These are the first source most owners think of when they think about small business financing. Banks loan money that must be repaid with interest and usually secured by collateral pledged by the business in case it can’t repay the loan.

On the positive side, debt is relatively inexpensive, especially in today’s low-interest-rate environment. Community banks are often a good place to start your search for small business financing today, since they are generally in better financial condition than big banks. If you do visit a big bank, be sure to talk to someone in the area of the bank that focuses on small business financing and lending.

Keep in mind that it takes more diligence and transparency on the part of small businesses in order to maintain a lending relationship in today’s credit environment. Most banks have expanded their reporting and recordkeeping requirements considerably and are looking more closely at collateral to make sure businesses are capable of repaying the amount of money requested.

Venture Capital Companies – Unlike banks, which loan money and are paid interest, venture capital companies are investors who receive shares of ownership in the companies they invest in. This type of small business financing is known as equity financing. Private equity firms and angel investors are specialized types of venture capital companies.

While equity financing does not have to be repaid like a bank loan, it can end up costing much more in the long run. Why? Because each share of ownership you give to a venture capital company in exchange for small business financing is an ownership share with an unknown future value that’s no longer yours. Also, venture capital companies sometimes place restrictive terms and conditions on financing, and they expect a very high rate of return on their investments.

Commercial Finance Companies – These non-traditional money lenders provide a specialized type of small business financing known as asset-based lending (or ABL). There are two primary types of ABL: factoring and accounts receivable (A/R) financing.

With factoring, companies sell their outstanding receivables to the finance company at a discount of usually between 2-5%. So if you sold a $10,000 receivable to a factor, for example, you might receive between $9,500-$9,800. The benefit is that you would receive this cash right away, instead of waiting 30, 60 or 90 days (or longer). Factoring companies also perform credit checks on customers and analyze credit reports to uncover bad risks and set appropriate credit limits.

With A/R financing, you would borrow money from the finance company and use your accounts receivable as collateral. Companies that want to borrow in this way should be able to demonstrate strong financial reporting capabilities and a diverse customer base without a high concentration of sales to any one customer.

How to Prepare

Regardless of which type of small business financing you decide to pursue, your preparation before you approach a potential lender or investor will be critical to your success. Banks, in particular, are taking a much more critical look at small business loan applications than many did in the past. They are requesting more background from potential borrowers in the way of tax returns (both business and personal), financial statements and business plans.

Lenders are focusing on what are sometimes referred to as the five Cs of credit:

o Character: Does the company have a strong reputation in its community and industry?

o Capital: Lenders usually like to see that owners have invested some of their personal money in the business, or that they have some of their own “skin in the game.”

o Capacity: Financial ratios help lenders determine how much debt a company should be able to take on without stressing the finances.

o Collateral: This is a secondary source of repayment in case a borrower defaults on the loan. Most lenders prefer collateral that is relatively easy to convert to cash, especially equipment and real estate.

o Conditions: Conditions in the borrower’s industry and the overall economy in general will play a big factor in a lender’s decisions.

Before you meet with any type of lender or investor, be prepared to explain to them specifically why you believe you need financing or capital, as well as how much capital you need and when and how you will pay it back (if a loan) or what kind of return on investment a venture capital company can expect. Also be prepared to discuss specifically what the money will be used for and what kind of collateral you are prepared to pledge to support the loan, as well as your sources of repayment and what measures you will take to ensure repayment if your finances get tight.

You should also ensure that your financial statements and records are current and that your internal control systems are adequate for handling the level of accounting and bookkeeping lenders and investors expect.

Getting To Know Business Financing

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Because of the troubles we face due to commercial financing crisis secondary to the economic situation that the global market is facing, we need to evaluate some newer alternatives so that we can still find some funding for our business finance. There are two major working capital financing options that we could go for namely cash advances and the popular credit card financing. They are both proven to be effective and at the same time a practical solution for small business owners like you.

A lot of business owners utilize these credit card financing basing on the activity that they will have in the future for their credit card processing. Some people also use their personal credit cards where they get cash advance from and this is often called as the credit card loan. Because of the ongoing financial problems in the market, small business owners utilize both methods just to keep their businesses running.

Both financial options are viewed differently by financing experts but sometimes they are called with the same term some other times. A lot of commercial lenders cancel or reduce their business lines of credits as well as other types of working capital loans. This is the reason why business owners are forced to depend on the cash that they can obtain through their personal credit cards.

This is the reality that most business owners face and most of them just had to go through business financing just to keep their businesses alive. However, before you plunge headlong into this method, you are urged to review the lending discussions or policies involved so that you wouldn’t face more troubles than what you are facing today.

You should only go for personal business financing as a last resort and not as your first method of securing your operating capital. If possible, you should avoid using this method just to keep your business running. You should consult with a financing expert first before you assume that it is your only source of working capital so that you would know your other options.

Finally, you should keep in mind that lenders that are providing business financing are already cutting back on their unsecured programs.

Business Finance and Corporate Value

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The primary goal of business finance is to maximise corporate value while also reducing a firm’s financial risk. Whether you are starting a business, expanding it or investing in it to keep it competitive you are going to need finance help at some stage of your business venture. Funding is one of the main keys to success in business and without the correct form and the right amount your venture is most likely to fail.

You may need to cover day-to-day expenses or you might need to cover the cost of new equipment. There are a lot of aspects within your company that will cost and that will need to be covered by funding; the rent or mortgage on your premises, all of the equipment that you will need to get your business going, all of your bills for the first few months and all of your staff wages. The finance that you gain will be used to pretty much run your company for the first few months of it being in existence, which is why it is so important that you get the right amount of finance to ensure you can run your venture.

When you are looking and seeking out your funding there are many avenues that are open to you such as the following:

o Loans

o Overdrafts

o Credit cards

o Family and friends

o Government grants

o Business angels

o Venture capitalists

When you are choosing and applying for your finance it is important that you keep the people who matter in the know and that you ensure you recognise the needs of people involved in your business, for example banks and the Inland Revenue, if you keep people informed they are more likely to be sympathetic to your needs. You should also aim to raise more cash than you need that way you can rest assure that all of your business expenses will be taken care of as the last thing you want to be doing is going back to your money lender and asking for more money.

If you are about to approach an avenue for capital, stop! Do you have your business plan? Your plan is a written statement of intent, it details everything that you want from your business and how you intend on achieving it. One of the sections within your plan will detail your financial forecast. It will describe all of your financial outgoings and how you intend on funding your business, which will include how much capital you are hoping to gain from which ever financial avenue you approach. Your business plan will demonstrate what you require your finance for. It will show why you need the amount that you do and how you intend to spend it. If your finance is coming from aspects such as a bank loan, which will need to be paid back, your business plan will describe how it will be repaid.

Business finance is what will make or break your business so it is essential that you get it right first time.

Creative Business Financing-6 Ways to Creatively Secure Business Capital

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Creativity is key when you own your own business. If you are a small company you might be the owner, marketing department, sales, accountant, cashier and even the janitor all rolled into one. And each new challenge requires a creative new solution. Even if you are larger you probably still have a hand in everything that goes on in the company.

It makes sense then, that you would need to have creative business financing when it come to your business as well.

There are basically two ways you can approach the problem of creatively financing a business. You can try to bring in money from an outside resource to help you meet expenses, or you can try to cut expenses in the first place. Fortunately, there are plenty of creative businesses financing techniques you can use for both.

Spending Less-Creatively Financing by Saving Money

Create a Buying Alliance

Many vendors will give a discount to those who buy in bulk. Unfortunately you’re not Wal-Mart. However, by partnering with another local business or buying alliance, you can receive the same discount as the large retailers.

Use Open Source Software

Instead of purchasing Microsoft Office for every computer in your business you might consider using the open source software OpenOffice. It’s free and an excellent substitute. If you need to do some basic photo editing, you might try GIMP. For virus protection try AVG or windows Security Essentials. Go to Cnet.com and take a look through all of the free downloads offered there. You might find some excellent alternatives to the expensive software you were considering.

Brainstorm with employees

If you have employees, gather everyone together and explain that you need to save money. Ask what ways they can think of to save money. You may find your employees are willing bring their own coffee mugs to work, or make the office party a potluck if they understand the company’s situation.

Getting more-Finding the Most Creative Business Financing Options

If cutting costs wasn’t enough, it may be to time to look for some creative business financing from outside sources. Here are a few places you should check.

Business Financing from Family and Friends– Virginmoneyus.com

Many companies have borrowed money from family and friends to get them through tough times or off the ground. Family and friends can be an excellent resource, providing low-cost or even free loans. It can also be dangerous for the relationship. Unlike a typical creditor, you will need to spend time with this lender. They may also feel that because they gave you money they have a right to interfere with how you do business. Companies such as Virginmoneyus.com will help you make the loan official. Laying out terms and making sure that both parties understand them is the best thing you can do to protect their investment, your business, and your relationship.

Creative Revenue Based Lending

Another creative business financing option is revenue based lending. At a time when the Credit Crunch has banks hesitant or unable to loan, this alternative lending process has appeared. Revenue lending focuses on what a business actually makes, rather than its owner’s credit score. This allows companies to lend to business owners at highly competitive interest rates and with much more flexibility on repayment options. Performance is not alone, as hundreds of revenue based lenders have received press coverage recently by an excited media.

Crowd Funding-Indiegogo.com

If you want some REALLY creative business financing, check out Indiegogo.com. Users can post a project, and how much money they need to raise. You can then set what sort of incentives people who donate can receive. For example, one user received a few thousand dollars for her small business collected from a few hundred lenders, who expected nothing in return. The idea is very creative and will allow you to practice your pitch at the very least. So far this crowd funding website has funded more than 5000 projects across the world. 

This list may be short, but as the beginning of the article stated, you need to be creative to be a business owner. Hopefully this was enough to get your mind moving in new directions so that you can come up with your own creative business financing solutions. If you have ideas, then please share them with a comment or a message. 

Getting A Business Financing Loan

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Business financing loans are a line of credit which help people who are in business. There are different kinds of business financing loans that are offered to different lenders either to raise funds or loan capital to your business in order to expand your company.

Although there are many ways also to finance your business and one should have sufficient cash flow within the existing business you have so that the lender will be able to finance the growth of your company by its own means or you can turn to a bank or other financial institutions that can provide different variety of loans.

Having a business financing loan is not as easy since they have some criteria or financing programs where in you meet the following criteria such as:

  • Your business must have commercial customers
  • Your business must be established and must have consumers or customers.
  • They don’t finance on real estate projects

Some of the business financing programs:

  • Business are available of every size
  • Easy to obtain
  • Have many advantages over conventional business loans
  • Can be set up in a few days

There are some business financial loans that don’t require you to have a good personal credit or showing countless financial statements since their financing program or loan allows being flexible to help your business grow but before looking for a business financing loan, you need to know how business loans work and used.

You can see that there are many sources of financing loans that are geared to types of businesses but the sources have certain criteria for investment and loan but that depend to the area which they participate.

These are some of the areas of Business Financing Loan:

  • Commercial Property
  • Start-up Financing for business
  • Loans for Government
  • Purchase Order Advances
  • Leasing Equipment
  • Commercial Financing
  • Invoice Factoring
  • Asset Sales Leaseback
  • Investment Banking
  • Angel Investor s which is known as informal investor
  • Venture Capital known as Private Equity Capital

But private money business financing loan is different since it includes equity loan, hard money as well as private money loans. They limit only to small business investment companies, private investors, business angels, ventures capital firms and commercial lenders.

The loans have two types for you to choose when in regards of terms in payment. There is the short term and as well as long term which suits your budget and you will notice also that there are lots of commercial lenders, business loan brokers and business financing companies had gone out of business due to global crisis and many people were having loans anywhere and everywhere in order to survive.

If you need financing for your business, you need to plan and study hard of it since financial institutions requires business plan that includes detailed start up cost, marketing plans, monthly expenses, projected profit, etc. Remember that having a business one should do hard work, passion, and determination and have dedicated workers who desired to have the business of their boss grow with success.

So If you think that your business is doing good and need some additional capital for expansion, then you need to plan for that and think it over to have a successful business.