Victory Investment

Archive for February, 2011

For a business that has just started, Phoenix small business investings experts know that financing is a challenge. And, in many cases it is what is needed to create growth in a company. Selling on credit terms increases the requirement of working capital. This can sometimes lead to a cash flow shortage in the business. Instead of borrowing money from the bank to finance more of the credit terms, the accounts receivables can be utilized to get finance.

According to Phoenix small business investing officials, there are many commercial credit firms ready to provide such service. They will charge a fee on the amount forwarded, which is called the factoring rate. The factoring service helps companies with uneven sales pattern or seasonal sales. Start-up operations and those with little or no financial base also benefit from factoring. Businesses with credit history that will not allow a loan from the bank or a credit increase can and do make use of factoring services.

If you have a buyer with good credit strength in the market, you can use his credit strength to get finance, provided you have sold to him on credit. Phoenix small business investing specialists state that this is a perk to business owners with bad credit because their credit is not focused on. Each buyer’s credit is what comes under question. Commercial credit firms make their assessments based on your invoicing process, the buyer’s credit rating and very little paper work is involved. Funds disbursement is almost immediate, and you can utilize the funds readily. The financial accounts receivables are treated as collateral in such cases. Accounts receivable financing is also called factoring and is not a loan.

There are some guidelines to be eligible for factoring. The primary requirement is that you should have sold to a creditworthy customer; have delivered completely as a final sale without dispute or contingencies; the product has been accepted by the customer; and finally, a verifiable invoice exists. Other than this, the service is available to all industries dealing with product delivery to commercial accounts, or to industries that provide service. Phoenix small business investing companies also state that it is an easy way for businesses to obtain cash quickly. They can receive money within 24 to 48 hours in most cases.

Under the new Coalition Government mechanism for securing business finance and grant funding are rapidly changing and it is not all good news. Read more to find out about changes announced in the recent government white paper Local Growth, the future of Enterprise Capital Funds and the new Business Growth Fund.

The recent UK Government white paper ‘Local Growth’ announced that Grants for Business Investment will not continue after the Regional Develop Agencies (RDAs) are abolished and South East England Development Agency (SEEDA), for one, has decided that it will not be in a position to provide any new grants under this Scheme. 

Grants for Research & Development (R&D) will be adopted by the Technology Strategy Board next year although details and timing are still to be clarified. Budget constraints at SEEDA are currently preventing new awards being made so we as business advisors are not encouraging new applications for the time being. Tax Credits are administered by HMRC and they are still available to all companies engaged in R&D Projects. Existing approved projects will continue as planned and be able to claim their grants.

The Business Innovation and Skills Department has also issued a Paper following their consultation re Funding of Small and Medium Enterprises (SMEs).

The FOCUS will be on getting SMEs Investor Ready!

Enterprise Capital Funds will continue with 300m pounds of investment targeted at the SME high growth equity gap for early stage investment.

A new Business Growth Fund with 1.5 Bn pounds is established with the banks to target the upper end of the SME market in the 2m to 10million pound bracket for high growth companies with 10-100m pounds turnover per annum. Although this equity fund they seek to gain lending leverage of 2 pounds for every 1 pound in equity.

Supply Chain Finance (SCF) will be addressed by Government working with large businesses to increase SCF.

Exporters will also be helped with the Export Guarantee Scheme being beefed up to provide bond support.

The tax Regime will be addressed as soon as the Coalition Government feels it can to give UK businesses the most competitive tax regime in the G20! Hoorah!

The Grants regime of the recent past is no more and a new body, the ‘Business Growth fund’  will be set up to invest the banks own money, up to 1.5bn pounds equity to assist viable SMEs to grow and contribute more to the economy. Additional funds will be sought from European Investment Funds to augment the bank funds. (This is a model which the Commonwealth Development Corporation has operated successfully since 1994 without taxpayer addition) The Enterprise Finance Guarantee Scheme will continue to operate until 2014/5 but with the banks under pressure to put up barriers in relation to the degree of guarantee they seek from SMEs for these funds.

So a great deal of change forecast and it will take time to bed down, but it does seem to me that in this mélange of actions we have a range of options far greater than we have had before to bring service and finance closer to the SMEs.

The multi layered bureaucracy that was there before seems to be getting the scythe applied to it and more of the monies identified for SMEs will actually be delivered to them. The last government was achieving a delivery of 1 in 3 pounds of public spend to SMEs, so an engineering efficiency of less than 33%.

Exciting and changeable times.

When investors evaluate the quality of money managers the first document they ask for is a published track record. Right or wrong, they assume managers are competent if they produce competitive investment returns. However, they may not know the legitimacy of the track records:

Are the records are in compliance with Global Investment Performance Standards?
Are the records audited by an experienced, independent third party?
Do they represent the performance of all assets or a composite of assets?
Is there full disclosure for the methodology that was used to develop the track records?
Are the records certified for accuracy by the company and the audit firm?

Legitimate track records are an important document when investors select money managers. However, what about the hundreds of thousands of financial planners and investment advisors who do not have track records? They provide financial advice that drives their clients’ investment decisions, but they do not make the decisions for clients.

Advisors want prospective clients to accept their verbal claims for performance, in lieu of track records, or they resort to deceptive sale tactics to create fake track records. The three most frequently used tactics include:

The use of references who confirm the performance of the advisors. However, the references may be friends or associates who have been coached to make positive comments about their investment results.
The development of track records using hot performing mutual funds. However, they selected the funds after the performance occurred. They know investors have no way of knowing when they began recommending the funds to their clients.
They market “model” portfolios of securities, mutual funds, ETFs, and hedge funds. In the fine print they may or may not disclose model portfolios are not based on their clients’ actual experience. Their models are supposed to “represent” the performance of their clients.

In the absence of GIPS compliant track records, what can investors rely on to determine the quality of the professionals’ advice and recommendations. There is no easy solution, but PaladinRegistry.com recommends investors use the following process.

For competence, ask for documentation that describes the advisors’ experience, education, certifications, designations, accreditations, and association memberships.
For ethics, ask for documentation that describes their compliance and criminal records. Also, limit selections to professionals who are Registered Investment Advisors, Investment Advisor Representatives, and acknowledged financial fiduciaries.
For business practices, ask for documentation that describes their fee schedules, minimum fees, compensation, reporting systems, and meeting frequencies.
For services, ask for documentation that describes their planning, investment, insurance, tax, and legal services.

It is unfortunate, but advisors omit, misrepresent, and exaggerate information to gain control of investor assets. To protect your financial interests, you or an experienced third party should conduct a background check to validate the accuracy of the information that you have been provided by the advisors.

In 2003, Paladin began providing information services to investors who use the services of financial planners and financial advisors. Our services include background checks, quality ratings, online documentation, and a free service that matches investors to planners and advisors in their communities who achieved the Registry’s highest quality rating (five stars). Visit Paladin’s website PaladinRegistry.com for additional information.

More and more people are trying their hand at buying and selling real estate as the country slowly recovers from the effects of the recession.  Unfortunately, most of them don’t even have a full understanding of how the real estate business works. They often invest their money blindly, hoping that they can strike a good deal.

Most people speculating on real estate look for investment property advisors. Their hope is that these advisors will help them find their way around the real estate industry.  However, most of these inexperienced investors tend to choose the wrong advisors to pair up with.  Although there are good investment advisors out there, some take advantage of their client’s lack of knowledge. They are notorious for leaving their clients alone and without help once they get their payment.

Since it’s important to get a good investment property advisor, you need to know where to look for one.  Ask your friends or family if they know of any reputable consultants. Don’t hire them right away though; you first need to know how well he or she works to be sure.

Some investment property advisors are known for their high quality service, while others are known are known for their affordable rates.  It’s nearly impossible to find one that offers both quality and affordability.  The best advisors have a lot of business connections and excellent resources, so it’s not surprising that their services aren’t cheap.  However, those that offer dirt cheap rates might only be after getting more clients.  Look for an advisor that offers good work at a reasonable price.

Make sure that you choose an advisor that knows how to buy and sell property the right way.  He or she must know how to best exploit his or her available resources.  Good investment property advisors are able to make the most out of any transaction, allowing you to get a better deal when buying or selling your property.

Finally, the best investment property advisors should always tell you the truth, even if it hurts.  If the property is hard to sell, then he or she must not sugarcoat the situation.  It’s better to have someone tell you about unpleasant realities rather than be given false hope.  Just look for these qualities and you’re guaranteed to find a good advisor to help you with your investments.