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Small banks trend away from commercial real estate loans.

2016 saw further tightening in the banking sector, hitting small businesses even harder. “We’ve noticed a trend this year with the local, smaller banks sitting on [commercial] mortgage applications,” Marvin Adcock, Managing Director at BLS Finance LLC in Charlotte said. “Being based in a city where the banking industry is highly concentrated, we are able to notice these trends very quickly.” This type of behavior may be the result of regulator involvement, as multiple government regulators have been warning against this type of lending throughout the year.restaurant

In December 2015, the Office of the Comptroller of the Currency (OCC) issued a warning statement to the ‘Chief Executive Officers of All National Banks”, which stated “Historical evidence demonstrates that financial institutions with weak risk management and high CRE (Commercial Real Estate) credit concentrations are exposed to a greater risk of loss and failure. Maintaining underwriting discipline and exercising prudent risk management practices can help institutions succeed during difficult economic cycles.” The OCC wasn’t the only regulator to send these warnings against lending on commercial property. The Federal Reserve and the Federal Deposit Insurance Corp. (FDIC) also issued a joint statement, expressing concern about the booming sector.

So, while regulators are concerned about the health of the banking industry, who is concerned about the health of small businesses?

“We are proud to have shown many business owners the path to refinancing their commercial obligations this year. We have also been involved with helping many owners find freedom from high lease payment scenarios. Many of our alternative funding solutions have resulted in a rent-factor reduction of 50% or more. Others have even managed to bring that factor down to zero, by taking advantage of borrowing rules which allow them to buy larger properties at lower rates and then lease out up to 49% of the excess square footage, generating substantial income. Under these terms, we can free up as much as $25,000 per month in working capital – and the company gains a real stake in the property they occupy,” Adcock concluded.

The foreseeable future also appears to conclude that alternative lending solutions will continue to play an important role in the overall market.

Does your business struggle with high rent or other cash flow related problems?

BLS Capital Finance LLC
USA Toll Free: (844) 631-8150
International: +1 (980) 202-7990
http://www.blsfinance.com

Like it or not, minimum wage is going up.

repair-748147_640Though many businesses won’t really feel the increase of minimum wage, others might – and learning how to adapt now is vital. Mark Hurst, Vice President at BLS Finance spoke briefly last week on the topic.

“We are starting to see more businesses looking at ways to increase productivity and to reduce labor cost. With the minimum wage increase, I believe we will see new technology products replacing customer service and manual labor jobs. Over the years we have seen manufacturing improvements where machine vs. man is much more productive.”, said Hurst.

Companies benefit from these advancements by investing in new technologies and in many cases, a reduction in work related injuries also follows. Hurst went on to say that “it is never good to hear that someone is loosing a job to a machine, but the brighter side to one job lost is one job created. Even though we are losing a minimum wage job to a machine, someone has to build the machine and those jobs pay much more.”

So how does a small business adapt?

The purchase of any machinery comes with a price. But in almost every case, the return on investment (ROI) will always outweigh the cost long term. Equipment financing is easier than many owners might think. It is even possible to finance or lease used equipment with terms as long as 4 years. Business lines of credit are also available for handling payroll emergency situations, but credit lines are somewhat of a best kept secret in the marketplace.

If you do find yourself in an industry that’s immediately affected by the hike, there are a number of things you can do -and not all of them involve laying people off. We wish we could tell you that the minimum wage increase won’t hurt your business – or perhaps even give you a few tips to help mitigate the ensuing fallout. But with an unprecedented economic move like this, there are no definitive answers.

Does your business struggle with getting the funding that it needs?

BLS Finance LLC
401 North Tyron Street
10th Floor
Charlotte, NC 28202
USA Toll Free: (844) 631-8150
International: +1 (980) 202-7990
http://www.blsfinance.com

Acquisitions and mergers continue to challenge small business owners.

hand-427504_640“Challenging, to say the least…” That’s how a client at BLS Finance responded when asked about a recent deal he successfully completed to take over a ninth location for his New York City based restaurant group. The owner, who wished to remain anonymous, went on to talk about how difficult it has become to obtain financing solutions on the open market for business expansions.

Mark Hurst, Vice President at BLS Finance said that the firm “really had to think outside the box” to be able to bring the whole deal together, especially with the banking sector having very little interest in what they view as smaller, riskier transactions. “He had eight other locations, which really is what made this whole thing work. He was willing to collateralize some of the existing property, which he had $600,000 of equity in — and because of his strong standing with his current business model, we were able to offer him an advance of $400,000 which was secured against it. This was on top of an $800,000 loan we facilitated through a third party lender.”

Does your business struggle with getting the funding that it needs?

BLS Finance LLC
401 North Tyron Street
10th Floor
Charlotte, NC 28202
USA Toll Free: (844) 631-8150
International: +1 (980) 202-7990
http://www.blsfinance.com

Merchant Cash Advance consolidation – smart business, when you’re ‘stacked’ too high.

Here at BLS Finance, we have taken a heavy focus on Merchant Cash Advance consolidations, as of late. Too many ‘Merchant Cash Advances’ or other ‘Business Loan’ products ‘stacked’ on top of each other can be the result of the business owner encountering seasonal cash flow problems or through other unforeseen events, requiring additional working capital in a short frame of time. The problem with this type of borrowing (on top of borrowing) is that it can rear it’s ugly head very quickly. Terms are usually very short and interest rates can be very high on these types of loans.

If your business has been able to support high advance/loan payments, with not too excessive NSF’s, we will aggressively pursue a ‘first-position’ consolidation and should be able to cut your payments on the ‘stacked’ advances by at least 50% (via a full balance transfer), while also providing additional capital at funding (should your company require it).

Here’s what sets us apart from other business loan companies in the market, if you are ‘stacked’ and looking for relief:

1. We have a heavy focus on consolidations. This is one of our ‘sweet spots’. Your business isn’t required to ‘net’ anything, no maximum positions consolidated, no minimum credit score.

2. We provide repayment flexibility on consolidations — we offer daily, weekly, semi-monthly and monthly repayment options. All we require is that the average daily balance is sufficient to cover our monthly draw. We also love arrangements where we can have a monthly payment tied to a single, contractual deposit each month.

3. We don’t charge any PSF, Bank, ACH setup, or any other types of fees(other than a nominal origination fee at funding) on consolidation loans. We also do NOT charge NSF fees throughout the life of our consolidation loans — a concept extremely appealing to most merchants.

4. Our loans and advances operate like more of a line of credit than an advance/loan — our clients can draw additional capital at any time as long as they have been making regular scheduled payments. We will do a simple draw-down of additional funds, with no additional fees (after a review of bank statements to ensure no additional capital has been acquired through other channels and the business is still in good standing) and we can typically wire the additional funds the same day. We also offer term loans in 34 states (and growing).

Does your business struggle with getting the funding that it needs?

BLS Finance LLC
401 North Tyron Street
10th Floor
Charlotte, NC 28202
USA Toll Free: (844) 631-8150
International +1 (980) 202-7990
http://www.blsfinance.com

Big banks cutting back on loans to small businesses?

It is not just the smaller businesses who are frustrated; even larger, more established companies continue to have trouble getting bank financing. They are turning to specific lenders that have been a source of credit for Main Street USA for more than a decade. And BLS Finance is stepping outside the industry comfort zone to respond.

A Long-Term Trend
Most people expected that when the economy recovered and the banks stabilized, they would welcome back small business borrowers, and certainly larger ones. But that has not materialized. The percentage of all U.S. bank business loans of less than $1 million has declined from 52% in 1995 to just 26% in 2015..

The simple fact is that lending to small businesses is riskier, more expensive and less profitable for banks than lending to bigger companies. Much of a bank’s costs are the same whether it makes a $10,000 loan or a $5 million loan. Banks will continue focusing on the most creditworthy borrowers, and steer away from riskier loans.

BLS Finance is filling this tremendous credit gap. As the industry continues to grow and hone its underwriting ability, it should serve that role even more effectively.

Mark Hurst, co-founder and Vice President of BLS Finance Partners LLC, a provider of specialty loan products for businesses in all 50 states as well as Canada and Europe.

BLS FInance LLC
401 North Tyron Street
10th Floor
Charlotte, NC 28202
USA Toll Free: (844) 631-8150
International: +1 (980) 202-7990
http://www.blsfinance.com