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Asset Based Loan

What Vending Companies can do to increase their chances for Financing

Vending companies, companies that sell and distribute equipment such as Vending machines and Arcade games have always had more difficulty obtaining financing for reasons mentioned in a recent post.  In this segment, we will discuss what Vending companies can do to increase their chances of getting financing.

Vending companies can seek financing options that use other strengths of their company, such as cash flow, to secure the financing.  Instead of applying for an asset based loan, Vending companies can choose from a variety of financing options.  Another option is a basic business line of credit.  A business line of credit is significantly more difficult to qualify for, however, if a business has a longer time in business and there is strong business and personal credit, they may qualify for a business line of credit.

Further, if the Vending business provides the most recent 3 months business checking account statements, strong recent cash flow will assist them in their financing efforts.  If there is more than one owner and the 2nd owner has stronger credit, both owners signing will further allow the business to have a higher chance of qualifying.

Another way for a vending business to more easily qualify for financing is to apply for fewer pieces of equipment at one time.   This will allow for a more easy qualification process.   The final way is for businesses to voluntarily provide their financial statements.
Many business owners are under the impression that they should try to avoid submitting financial statements, even if their statements are strong.  This is an incorrect approach.
If the financial statements are strong, they should be submitted.

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Asset Based Loan

Changing your business name: Pros and cons

There are many reasons why changing a business name is necessary.  Sometimes the reasons are due to expansion, for good reasons, and also for not so good reasons, such as solving an image problem by finding a new name.

When it comes to financing, a name change is not a good idea and should be avoided.   Even if the business can prove it is the same company and only the name was changed, this explanation has always been looked at warily by lenders.   Often lenders see a name change as a new business.

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Other Factors

This hurts significantly in a financing request because if a company has been in business for 7 years, and changes the name in the last 2, it will almost look to a lender like the business is 2 years old.    Another factor in how the business is looked at is what the business credit report says.   If the business credit reports have the old company name, this will hurt.  If the business credit reports have the new company name and the business start date shows the full 9 years in business, this scenario will be penalized far less severely.

One answer would be to only somewhat change the business name, if possible.
An example of large corporate name change for a bad reason could be Valujet.    Valujet suffered a major crash in the Florida Everglades in the late 1990’s and primarily for this reason, changed their name to Airtran.

For instance, change  Alley Pizza to Back Alley Pizza or Alley lane Pizza.   Not Jim’s World Pizza.   If the name change is wholesale, it looks like owners have changed hands.

FAQ Frequently asked questions on changing the name of my business.

Will we have problems if we change our business name?

Existing customers may not recognize the new name of the business. You may also have to start an entirely new business with the secretary of state. This causes your business to be totally new legally and the time in business under the old name stops.

I bought an existing business. Should I keep the old name?

Keeping the old name makes your name recognition and branding much easier. You can have the full time in business under the old name and the time in business of your new name. Getting loans and establishing business relationships will be easier.

What should I do if I have to change our business name?

Contact your existing customers and let them know what the new name of the business will be. Explain the reason for the change. Create marketing materials to use at your place of business for your current customers to see. Contact the Secretary of State and try to change the name of the existing business profile listing without creating a new profile. You may be able to keep the full time in business under the old name with the Secretary of State.

Conclusion

a business wishes to change it’s name, the owners should consider if financing is in their plans in the following 2 or 3 years, and if so, this should be factored into the decision if the name is changed, and what it is changed to.

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Articles

Cash flow loan financing adds new product

There is a new cash flow loan financing program to help businesses get financing. Companies provide statements such as their bank statements to show their gross sales.

This program give many companies flexibility they would not normally have.   Many companies do not have financial statements that have a strong net income.  Most companies pay their accountant to take as many deductions as possible so they show the lowest possible net income.    Even more companies have business owners with damaged personal credit and limited or no business credit.

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This program which focuses only on the cash flow as the main requirement for approval, eliminates these decline reasons.   Businesses can get approved with bad personal credit, bad business credit and weak financial statements.   Businesses with several owners will need to have at least 50% ownership apply.

Approval terms are for between 2 to 18 months.   If a business has strong financial statements they can be used to strengthen the request and get a higher approval amount.
This new product lets a business use their sales to get a business line of credit.   The approval process requires little documentation and is fast.   The process normally takes between 4 to 7 business days.

Applicants can call in to discuss the features of this new financing to determine if it is a good fit for them.  A development officer will review the business profile and make a recommendation to the customer.   The customer can first discuss the plan with their Accountant so they can take all tax consequences into account.