Business Financing - Alternatives To The Government Enterprise Finance Guarantee

Earlier this year the UK government introduced the Enterprise Finance Guarantee scheme (EFG). The EFG replaced the Small Firms Loan Guarantee Scheme (SFLG) with the commitment to helping small businesses raise the funds they require to trade through the current economic downturn. The EFG is based on the government guaranteeing up to 75% of the value of a commercial loan offered by a company's bank. The company's directors will normally be required to personally guarantee the remaining 25% of the loan.

Companies are still finding it extremely difficult to raise vital finance despite the government claims for the EFG scheme. According to a recent report published by the Department for Business, Innovation and Skills, in the year up until the 3rd April 2009 a total of 2,369 loan guarantees to the value of GBP 178m had been issued, under both the Small Firms Loan Guarantee Scheme and the Enterprise Finance Guarantee scheme. This figure is significantly less than the GBP 205m guaranteed in the previous year. It is also far below the scheme's GBP 360m budget set by the Government in March 2008.

For this financial year the outlook now is just as worrying. The latest Bank of England figures show that new lending to companies continued to contract in May 2009, following a fall in April. Clearly, despite the government's assurances and backing, UK banks remain extremely reluctant to provide new loan facilities for businesses. I have recently had a number of discussions with small business owners which back up this analysis. It seems common place that new loan and commercial mortgage applications with the backing of solid business plans are being consistently declined (often at the last minute) with little or no rational explanation from the lender.

Based on the current evidence it seems very much that the banking system is reluctant to back any business opportunity unless it has almost a cast iron prospect of success. This situation is certainly stifling entrepreneurial activity and thus undermining the driving force required to kick start the economy and move it out of recession.

Given this situation, business owners are well advised to consider alternative options for raising finance. Business refinancing can help in this area. Business refinancing generally involves raising cash secured against tangible business assets thus giving the bank real security and the comfort required to release funds. Examples of business refinancing include:

Asset refinancing

The process of borrowing against the value of any fixed assets which are owned by the business.

Invoice financing

The process of raising money based on a company's outstanding invoices. Invoice financing could allow a company to draw down up to 90% of the invoice value immediately on the issue of a valid invoice.

Trade financing

Enabling a business to receive up to 80% of the confirmed order value up front to pay the suppliers required to fulfil the order.

Until lending eases businesses will struggle to trade out of the current economic situation. However it seems that they are unable to rely on Government initiatives such as the Enterprise Finance Guarantee scheme to allow them to access the funds they need for expansion and growth. Unfortunately Business Refinancing will not be suitable for all. However it is certainly an option that should be reviewed by all in the current climate.

Freightliner Commercial And Work Trucks, New And Used, For Sale With Clearance Prices And Special Dealer Financing

Freightliner commercial and work trucks, new and used, are available for sale with clearance prices and special dealer lending due to this economic down turn. Due to a contracting market, many institutions have surplus Freightliner work and commercial trucks on their records that they need to retail or lease. These in-house inventories are non income producing, therefore putting tension on the bank to make a arrangement with the consumer. These opportunities can be originate in the asking price, the lending or a combination of both.

An off lease commercial vehicle has been brought back to the lender as the lease has expired. The lessee has made a determination to give back the item in lieu of exercising the buyout option. A repo has arisen due to a failure to pay terms or a breach of the conditions of the lease. Either way, the lender has taken these trucks back and must recondition these Freightliners and either sale them or lease them.

The lender will either advertise their listing through their internal sales force or outside professionals such as brokers to move their inventories as fast as possible. From time to time as these inventories aren't moving, the bank could place these Freightliner work and commercial trucks up for public sale

The type of Freightliner work and commercial trucks we are going to distinguish as prospective opportunities for the consumer. are the following:

Freightliner dump trucks, Freightliner semi trucks and tractor trailers, Freightliner garbage trucks, Freightliner tow trucks, Freightliner vacuum trucks, Freigthliner big rigs, Freightliner boom and cement trucks, Freightliner tanker trucks

Some of the ways the start up and/or experienced business can find these opportunities are through trade publications, surfing internet search engines, contacting lease brokers for information and speaking to banks directly.

In addition to the Freightliner work and commercial truck clearance public sale offering discounted prices, the banks are working with the dealers to reposition these trucks with minimum credit requirments for their upcoming consumers. Instead of complete paperwork and stringent lending qualifications., these lenders are working with the start up and experienced onsumers closely to make a deal happen. A quantity of banks are offering credit programs with 3-5% down with nominal credit starting as little as 525. No past year income tax returns and financial statements are required..

At the current time, there are selected semi truck Freightliner truck programs that don't require a credit check. This is a huge opportunity for the owner operator or company driver to take a semi truck without worrying about their credit being an obstacle. In this market with massive layoffs and numerous companies looking to scale finance their operations and expenses, this is a scary period for the company driver. For other trucking companies seeking owner operators only, these no credit check monetary gives the company driver and the unemployed semi truck driver a unique opportunity to obtain a truck.

In closing, this is a buyers market for Freightliner work and comercial trucks. Check out all the deals in the market and make sure that you have a stable income base to assume any debt that you may occur.

Happy shopping for your Freightliner work and commercial truck and its related financing.

How Does Floor Plan Financing Work For Car Dealerships

Floor plan financing is a key element of the auto industry in both Canada and the United States . Exactly what is floor plan financing and how does it work?

This type of financing is in effect a short term inventory financing for both new and used car dealerships . Traditionally the floor plan industry was geared towards what we know as franchise dealers, i.e those dealers representing product for the likes of GM, CHRYSLER, FORD, etc .

The financing allows the dealers to carry sufficient inventory to satisfy customer needs and demands re model types, accessories, options, etc . It is an extremely large market in what is of course a multi billion dollar industry .

When floor planning financing works properly it is effective, has a reasonable cost attached to the financing, and is totally transparent to the consumer . As consumers when we drive past auto dealerships, either new or used, we don't care how the inventory got there, we just know its there for us to examine and purchase .

Floor plan financing is executed on both a small and large basis . It is not unusual for finance firms to use more esoteric finance vehicles such as asset backed commercial paper, Special Investment Vehicles ( commonly called SIV's ) etc. to finance the billions of dollars of inventory that the industry needs to move product through .

Naturally, whether we are talking about the largest GM dealer in town, or a small used car dealership with multi lines of vehicles there has to be a finance program that can grow and backstop that inventory .

In the Canadian marketplace as an example, with which this writer is more familiar , the independent dealers have as much need as franchise dealers for this valuable type of financing .

We have all read recently that many of the tier one floor plan firms such as GMAC and CHRYSLER CREDIT have withdrawn substantially from the market . This has allowed a number of private firms to enter the market and capitalize on the withdrawal of the ' big boys ' . Additionally, as the banks perceived the auto market as significantly more risky in the current 2008-2010 economic turmoil they also have scaled bank in their previous focus on floor plan financing for car dealerships .

Finance firms that execute well on floor plan financing initiatives are those that of course properly funded ; they also know how to collateralize the inventory through proper legal documentation and registration. The average term for a car being on the auto lot tends to be within 30-90 days . The floor plan financier registers liens on the vehicle, and when the vehicle is sold that lien is removed . The finance firm of course profits from the ability to charge the dealership interest over that 30-90 day period . Naturally this process repeats itself continuously . Lenders must have reasonable confidence in the financial viability of the dealer, more experienced and financially solvent dealers can naturally command larger floor planning facilities . Dealers also are subject to rigorous audits of the inventory . The lender wants to know the car is still there and hasn't been sold and not paid for of course! Therefore VIN ( vehicle identification numbers ) are checked regularly by finance company personnel , insurance is validated, and random inspections are common

Overall the auto floor plan facility is a key aspect of the automotive market , and is a significant benefit to both new an car dealers alike .