Collateral

Collateral

You may have collateral and not even realize it...

Collateral

When looking for a source of capital, there are several factors your lender may take into consideration. For instance, traditional lenders will first look at your company’s credit history, balance sheet strength, and years in business when underwriting a loan. This way of thinking leads to many businesses being turned down and not receiving the funding they need.

SouthStar Capital takes a non-traditional approach and uses your business’s assets, or collateral, to make our funding decision. In-turn we are able advance your business capital by using your collateral as leverage.

Accounts Receivable

Any outstanding invoices or money owed to your company by your customer.

Equipment

Equipment your company owns, such as machinery, trucks, and specialty equipment.

Inventory

This includes both Work In Progress (WIP) and Finished Goods, each evaluated differently.

Purchase Orders

An order you obtained from a quality company that has agreed to accept your product or service.

Real Estate

Property consisting of land or buildings that is owned by you or your company.

Intellectual Property

Refers to creations of the mind and includes such things as patents, formulas, and inventions.

Stock

This includes both traded and privately held stock, each being evaluated differently.

Letters of Credit

A letter issued by a bank guaranteeing that your customer is able to pay for your goods or services.

Certificates of Deposit

A savings certificate issued to you, by the bank, with a fixed interest rate and maturity date.

Rolling Stock

Both powered and non-powered wheeled vehicles used by your business on the railway or roadway.

Contact us today to learn more about the collateral you may have and your funding options with SouthStar Capital.

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The SouthStar Funding Process

What is Accounts Receivable Financing

How does Accounts Receivable Financing Work?

What is Accounts Receivable Financing
  1. You provide products or services to another creditworthy business on terms.
  2. You send the invoice to your customer and send the invoice, along with any support documentation (i.e. purchase orders, contracts, etc.) to SouthStar Capital.
  3. SouthStar will verify the invoice then advance a portion of the invoice directly to you, typically 70 to 90 percent.
  4. Your customer then pays the invoice by ACH, wire transfer, or a check made out to your company, but sent SouthStar Capital’s address.
  5. SouthStar then sends you the invoice balance, less our fee.

Contact us today to learn more about the SouthStar Funding Process!

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The SouthStar Advantage

SouthStar Advantage

Non-Traditional Approach

  • Our credit decision is based on your company’s assets, not past financial performance or time in business.
  • Our in-house Underwriting allows for quick funding, typically in 2-5 days.
  • Our diverse product mix allows you the flexibility to select what most benefits your business.
  • We are a private company allowing for customizable solutions in your company’s best interest.
  • We work with both Tax Liens and Balance Sheet issues.

Grow with Confidence

  • We prescreen potential clients of yours allowing, you to better understand their strengths, payment habits, and credit worthiness.
  • We do not impose limits on our clients, so your growth is completely in your hands.
  • You have the option to build our fees into future bids or projects to offset the cost of growth/finance.
  • We fund within 24 hours of receiving an invoice to ensure your growth never out paces your obligations.

Personalized Client-Centric Service

  • With us, each client is paired with an Account Manager that handles their daily funding needs.
  • You deal directly with decision makers to expedite initial and future fundings.
  • We take a hands on approach to addressing each and every client need.
  • Submit invoices electronically to your dedicated Account Manager for prompt funding.

Real Time Accounts Receivable Management

  • 24/7 access to online reports through our website or your smart phone.
  • You can focus on running your business, instead of working capital or receivables collections.
  • We track your receivables as part of the overall relationship, so you minimize personnel cost.
  • Customizable reports are available to allow you to manage cash in real time.
  • You no longer have to worry about payroll cycles.

 

Contact us today to learn more about how SouthStar can tailor-fit a solution to your company’s specific needs!

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Your Business needs Cash Flow, but You have Poor Credit…Now What?

Need Cash Bad Credit
Need Cash Flow Poor Credit

Many business owners go through the struggle of having a sufficient amount of working capital to keep their company up and running. The typical solution to this problem is taking out a bank loan to support their company through the rough patch. But what are the options when they have a limited or challenged credit history? While banks can be an aid to businesses, having credit issues will most likely result in being turned down for the loan.

The Good News

The good news is that there’s an alternative solution know as Accounts Receivable Financing. AR Financing takes a business’s existing invoices and uses them as collateral to provide a working capital line of credit. This allows the business to receive immediate cash flow from their own assets, without having to wait for payback from their clients. Businesses typically receive 70%-90% of the invoice upfront, then receive the remainder once their client pays, minus a pre-agreed fee. Since the business track records and debt profile of the client (the account debtor) is heavily weighed in the underwriting process, personal credit score or balance sheet strength is not a determining factor. Many AR Financing companies also provide third party services, such as collections, payment processing, account management, and underwriting, that are an added advantage for using their services.

Cash Flow Growth equals Business Growth

Overall, there are many benefits to Accounts Receivable Financing for businesses both with and without credit issues. The fast funding and quick application process allows for immediate cash flow in a time of need. This will eliminate a business’s everyday cash flow problems, such as being able to make payroll. Unlike a loan, a business uses their own assets for funding, so there is no debt added to their balance sheet. Also, having accessible working capital gives them the ability to grow their business.

 

Learn more about how Accounts Receivable Financing can benefit your company’s cash flow, contact SouthStar Capital today!

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10 ways to build strong referral relationships between you and SouthStar Capital

Referral Relationship

SouthStar Capital prides itself on the relationships it has created over the years with referral partners. We have noticed that there are often two types of relationships that evolve. The first is someone that occasionally sends a client here and there to us as a trusted resource and those that make SouthStar Capital a part of their company resources. My question is which do you want to be?

To be an effective at networking, you should constantly be strengthening your relationships with referral sources. The best way to go about this, of course, depends on each individual referral source and what he or she responds to.

So while there isn’t one “best” way to solidify your connection with your client, you can take a number of actions to build good will and credibility in those relationships. Here, I offer my top 10 examples that should give you some ideas of how to use SouthStar Capital and get you off on the right foot solidifying loyal clients. This list isn’t exhaustive, so please feel free to add your own actions to it.

1. Arrange a one-to-one meeting. Setting up a meeting between your team and clients with SouthStar Capital goes a long way to strengthening the clients understanding and expectations of what we can provide. Meeting a referral source in person is an excellent opportunity to learn more about his or her business and interests. Plus you get to see in person examples of how we can help your clients first hand. Not to mention that you can set up this meeting in your office which solidifies the relationship between you and your client making them appreciate the help you are giving them. If you prepare questions in advance so that the conversation flows smoothly, you will also see better results. Be ready to give an update on your business and to ask lots of questions about your client’s interests.

After we’ve met at least once, you may also consider inviting your clients to participate in some type of recreational activity, such as a golf outing, fishing trip, tailgating, or happy hour. This can be a good opportunity to let your client see a different side of you in an informal setting. This reassures them that you have their best interest at heart. Making them even more dependent on your for your business even though you are introducing them to ours. Take banking referral partners for instance. Setting up this type of arrangement gives your client a means to grow their business outside of your ability and keeps their checking accounts, credit cards, savings, and investments all with you. We are only providing the working capital for them to grow their business to a level that will eventually meet your criteria. In return, they can turn a rejection into a strong client with more opportunities down the line.

2. Send a thank-you card. At SouthStar Capital we pride ourselves with handwritten thank-you cards to our clients. This makes a great impression, especially in this age of electronic communication. In that card we can also mention you and your company by name again reaffirming your relationship. If you write a personalized note that mentions what you’re thanking your referral source for then again both relationships are strengthened and a team mentality begins. Often this results in great referrals from your clients back to you of other business owners that could use your help. If you’d rather send something online, SendOutCards.com is a useful resource.

3. Send a gift. Like a thank-you card, a gift — however small or inexpensive — can help build visibility and credibility with your clients. We can work together and send each other’s marketing materials and give away in the same package. Try to find out what his or her likes are (such as favorite foods, hobbies, etc.), and send a gift that is personalized.

4. Call a referral source. An occasional, casual phone call is a good way to keep our relationship strong — when you take care to call or respond to our calls we can better understand what types of clients you are looking for. Perhaps you are a part time CFO. You may want to focus on recycling companies and companies with strong equipment needs. By having conversations on a regular base with our team we can better understand what a good client for you looks like. In turn helping you to establish more clients as well as, helping us get someone that knows our process and how we work in the office. It’s also a good idea to have a piece of news or some tidbit of information to pass along that will benefit or interest your clients. It helps in the closing process and shaping our funding solutions around their needs and desires.

I personally love to add hobbies that the client loves or information about their families. This way you know more information about them and trigger points that will help you break down some of the walls that they may have up. For example I had a client the other day that loved Steelers Football. Letting you know that helps you have a topic of discussion to help break the ice.

5. Display a source’s brochure. Doing a bit of sales work on behalf of our referral sources can not only enhance your relationship with the client but also advertise to other clients a resource they needed. If you have a public area for your business, offer to place our materials where your clients can read them.

6. Extend an invitation.  SouthStar Account Executives are always out networking. We would love to invite you to our sources of networking and other networking events. We can even work an event with you, introducing people we run into to other business people you know creates an opportunity to meet others in your target market. It may also provide new business opportunities for us both. Of course it also helps us strengthen our relationship and understanding of each others products and services.

7. Nominate them for an award. Watch for these types of opportunities. Local service and civic organizations often present annual awards recognizing contributions to a particular cause, and local periodicals often sponsor awards contests for business people. Find out which groups and interests your referral source is involved in and check to see if there is a form of recognition associated with them. Then we can nominate each other creating more resources for establishing each other as experts in our fields.

8. Include a source in your newsletter. Even a brief mention of SouthStar Capital in your newsletter can pay dividends down the road, including the opportunity for us to reciprocate the favor in our own newsletter.

9. Arrange a speaking engagement. Let us help each other get in front of a group that would be interested in our business or area of expertise. Local chapters of service organizations, such as Rotary and Kiwanis, are always looking for good speakers. If you belong to a group that invites people to speak, use your contacts to help your source make the rounds among various chapters.

10. Turn the table. Let help each other find other referral sources we might find useful. It’s often a wonderful way to build your relationship. By us helping to build each other’s centers of influence we are increasing our business, and helping to create a debt of gratitude that will encourage these referral sources to send us back even more referrals.

Commercial Hard Money Loans & Alternatives

Commercial Loan

With the tightening of business credit, companies are struggling to make ends meet amid a backdrop of uncertainty. Companies are taking longer to pay invoices and the effects are reverberating throughout the global economy. Banks raise interest rates and businesses are left to deal with the consequences. However, there are credit alternatives that allow companies to assume a more hands-on approach to financing their business. They include asset-based lending practices and the most common ABL financing vehicles are purchase order financing, and accounts receivables factoring. Both options empower businesses to take charge of their capital requirements and are a much more viable financing option when compared to the exorbitant interest rates on business credit lines and bank loans.

Purchase Order Financing

The principle behind purchase order financing is to provide businesses with the working capital to purchase the raw materials and parts to complete existing customer purchase orders. Companies can use the value of their order as a form of collateral in order to secure the working capital so vital to their business needs. Financing companies will essentially purchase the order itself, provide the company with the necessary funds, and then proceed to collect on the invoice. The benefit is access to immediate funds and the flexibility of better cash flow management. In addition, purchase order financing allows companies to pursue any business opportunity, regardless of its scope.

Accounts Receivable Factoring

Receivables factoring includes taking an open customer invoice and using it to secure financing. In this case, the decision to lend money is based on the age of the invoice and the credit worthiness of the customer. There are no credit checks on the company and no review of any financial statements. The onus is on the customer’s ability to pay the invoice. Companies get immediate working capital, while the financing company collects on the invoice. In a sense, receivables factoring can be viewed as outsourcing accounts receivable collection. Once the customer pays the full amount, the company is reimbursed the difference and the financing company charges a small fee.

Today’s businesses must take charge of their finances. Banks and conventional lending methods are tied into the ups and downs of credit markets and the swings in business cycles. To avert a sudden lack of credit, companies must be proactive in securing their own financing needs.