Esquire Financing offers non collateral & Biz Loans to SMEs

Esquire Financing Inc. opens its first branch in Cebu City in its bid to boost presence and service-base in the SME market in the region. EFI President and Chief Operating Officer Navin Uttamchandani said recently that the firm offers non-collateral loans from Php100,000 to Php10 million to SMEs.

With 99.6% share of about one million registered businesses and employing 64.9% of the workforce, according to the Department of Trade and Industry, strengthening the competitiveness of the small and medium enterprises (SMEs) is critical to the Philippines’ inclusive economic growth. However, due to collateral requirements, revenue-driven structure of banks, and high minimum loan amounts, only 20% of these SMEs are served by formal financing institutions.

Esquire Financing Inc. (EFI) is a direct response to the need of the underserved SMEs for a trusted financing partner. EFI provides fast, hassle-free non-collateral business loans tailor made to each SME’s needs, goals, cash flows, capacity, and financial position.

Uttamchandani pointed out that SMEs are crucial for the country's economic growth, job creation and innovation. However, their lack of access to financing, due to high minimum loan amount and extensive documentation requirements, has often been cited as one of the constraints affecting their growth, he added.

Approved  loans

In its one-month operation in Cebu since it started in September this year, the financing company had already released six loans totaling to Php6 million to its clients here. And its potential loans to businesses in Cebu and the region are seen to go up amid the growth of business expansion here, Uttamchandani said.

EFI has catered to various industries such as wholesale and retail trade, manufacturing, construction, accommodation and food service, and administrative and other support services.

Last year 95% of SMEs EFI served are located in Luzon, majority of which are in Metro Manila, while the Visayas and Mindanao regions accounted for the remaining 5%.

After four years since it started in 2011 EFI had already released a total of 17,849 loans worth P15.02 billion to 3,233 clients. From then on, it has since served over 5,000 businesses across the country.

In 2014 the company recorded a total of 5,590 loan releases, covering 1,821 clients.

The company also generated total revenue of Php641.4 million, up Php5.5 million from the 2013 revenue of Php635.9 million, according to its 2014 annual report.

How Equipment Loans can help your Business Thrive

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Different companies enjoy common benefits from capital equipment. Machinery has direct and indirect effects on your bottom line. A new oven and forklift each make your business more productive. Meanwhile, interest and depreciation expense are tax write offs that indirectly improve business profits.

However, your business may not qualify for a general purpose loan to buy much needed equipment. Some obstacles include:

● Lack of operating history: 2 years of profitable operations are preferred by most lenders.

● Little or Poor Credit: A strong payment history under your business tax id may be required. Sole Props must rely on strong personal credit, which puts other assets more at risk.

● Collateral: Many small businesses lack quality collateral coverage. A 1to1 ratio of collateral to loan amount is often needed. Lenders would prefer to not take tables, chairs and food supplies. Heavy machinery and financial assets are examples of higher quality collateral.

Delaying the purchase of new equipment is often not practical, either. Your restaurant may need to quickly boost capacity for lucrative events. Companies need to keep pace with competitors who adapt new technologies. In other cases, manufacturers must replace machinery to maintain production.

So, how can you buy capital equipment with minimal credit, business history or collateral?

Equipment loans are an effective solution.

Equipment financing has mutual benefits for the borrower and lender. These include:

Easy Collateral: 

Your new oven or stamping press serves as quality collateral. Lenders feel more secure making loans backed by specific and valuable assets. Equipment loans also help borrowers overcome collateral shortfalls. A new pizza oven or stamping press is quality collateral for the lender.

Borrower liability is lower with equipment loans, as well. If you default, the machine is simply taken by the lender. However, you may be responsible for a difference in loan balance and equipment value at the time.

Best Practice: Make sure to understand all terms of the loan. You should ensure that collateral beyond the equipment is not pledged.

Trade In Options: 

Technology is constantly changing. A recent breakthrough could make your production presses obsolete. Without liquidity, your business may be at a disadvantage to competitors.
Many equipment leases have trade in clauses to keep pace with tech upgrades. For lenders, trade in options improves the retention of borrowers.

Best Practices: Ask the finance company about prepayment penalties if you pay off the loan early. You should know if there are time minimums before equipment can be traded in.

Faster Approvals: 

Specialty finance companies such as Business Loans Direct have close relationships with manufacturers, which may include special financing offers.

Credit is a minimal or non-factor since the lender knows how the loan will be used. Conversely, general purpose loans pose greater risks for banks. Equipment financing limits collateral and repayment risks to the equipment. The result is easier qualifying and faster approvals.

Ask upfront for the approval criteria. Some lenders may still require certain credit levels or financial ratios. You will save time and money knowing in advance what is needed.

Entrepreneurs who anticipate borrowing needs maximize the ROI of their business loans. You should manage capital equipment for it's full potential. As equipment ages or becomes inefficient, the tax and productivity benefits of new machinery can also be appealing.

You can also check the SBA for special equipment financing opportunities.

What Will Replace the Mining Boom?

As Australia reaches the end of its mining and resources boom the country faces a proverbial turning point in investment critics say the economy could be facing off against some particularly tough problems. The mining boom that lasted a decade, ranging from Western Australia’s Pilbara region to Queensland’s Gladstone has been pegged as the country’s economic saviour. It was so “safe” that it protected the economy throughout the global financial crisis. But now that times are changing an urgent substitute is required.

The last five to ten years have witnessed inflations in the prices of both iron ore and coal as China has had an insatiable need for raw materials. The departure of this major player has had its effects on the market but China’s absence has been down played by the government. The government has defended its stance on the issue by alluding to the “mega projects” in the pipeline for the resources sector, implying that this is where the economy can pick up from. The project approvals will flood the economy with investments worth billions, according to the Bureau of Resources and Energy Economics.

$268.4 billion was committed to energy and resource projects by October this year. That means that 87% of projects have been finalised through financial decision but economists tell us it is too little to meet demands. They are asking pertinent questions about what will come after all this investment as the country does not have much support beyond what is on offer in the resources sector. As we come to the end of a resource boom the prices of commodities are stabilising or dropping in some cases. It also means that the number of investors the country has to borrow money from has dropped significantly.

$268 million has already been committed to resource investment, $292 billion of projects are stuck in the feasibility stage and $133 billion have been announced publicly. Those that have not been booked are considered questionable and unconfirmed and it is likely that the country will see fewer projects come to fruition than what was originally forecast. Furthermore the increase in value for committed projects is not so much a case of more projects being pushed through than it is a matter of the costs to complete the projects going up.

In retail growth has been very modest while services and manufacturing are contracting. The general outlook for business in 2013 is that it will also contract. This, in light of the government’s commitment to budget surplus, is likely to mean that the government’s contribution to economic growth is likely to fall short of what is required.

The RBA thinks that to get around this consumer spending needs to be stimulated through lower interest rates. According to the RBA it is construction that will step into the big shoes left by the departure of the mining industry. Housing Industry Association spokesman David Bare has said that the construction sector is likely to be affected by the government’s red tape and the expense of doing business in the country.

With the cash rate at the same level as during the global financial crisis, non-mining sectors are particularly vulnerable, despite the hub of activity in the mining sector and interest rates hitting record lows. Banks like Bankwest have been relatively slow to react to the interest rate reductions with few of them passing the full interest rate reduction onto their customers and customers, of course, have been even slower to respond to the bait that has been put in front of them.

The RBA has also shown its interest in dropping the Australian dollar from its current high in order to give more impetus to tourism and manufacturing.

Some Tips On How To Finance Your Business Venture

One of the best things about being human is that you can make the choice to be involved in a business to increase your income. There is no limit as to the type of businesses you can be involved in and you are free to venture into any field provided you meet the requirements of the said field. In addition, you do not have to quit your regular job as you can always employ someone to handle your business for you. The most important thing that you have to consider is the capital for the venture.

Here are some ideas on how to raise the money.

1. Doing a partnership

This is one of the oldest ways to raise capital for any business. Long before the laws of partnerships were drawn, individuals would make an agreement and start a business together. The most common agreements were those that gave the partners equal ownership of the business. This meant that they both contributed the same amount of money from the start. However, as time passed on, the type of agreements changed and one could contribute according to their strength financially. If you are having a hard time getting the cash to start on your own, you can enter into a partnership with someone you trust and this will make the starting easier.

2. Selling some personal stuff

If you are not one to enter into partnerships, you can consider selling some stuff that you no longer need to raise the money. You might be shocked to learn that you have so much junk in your basement and bank yard that adds no value to you but would be valuable to someone else. If this is the case, you can spend a weekend indoors as you select all that you consider and make plans on how to sell it. Getting buyers is not a hard thing as you can always research online. It is important to mention that should find that most of the things you want to sell are in good condition, selling them by auction would be the best option. To get the best prices, clean and repair them and have a moderately good opening price for the auction and you will find yourself with some good cash at the end of the auction.

3. Saving from your salary

This is another option that you can use if you feel that you have the ability to arrive at the needed capital figure within a year. You can opt to cut down on all unnecessary spending and save as much as you can. To achieve this, you will need to have a plan so as to have a target. Once you have a list of what you are to do and what you are to avoid, stick to it. Be aware that this options demands that you have a lot of self-discipline for it to work. It helps to have a savings account with strict withdrawing restrictions to make sure the money stays in the account.

4. Getting a loan

Loans have been used since time immemorial by those who want to start businesses but have not the funds. There are many lending institutions that give the loans and all one has to do is identify one and begin the process. In most cases, the loans will vary in terms and conditions. You will find that secured loans have their own terms and conditions which is the same case with the unsecured loans. As you get the loan, make sure that the institution is credible enough to avoid being duped.

Nicasio is a financial consultant and is widely knowledgeable on all matter finance. He has helped many California personal loans applicants through his timeless advice that is available on his blog. He also lectures college students in the field of business entrepreneurship.

Need A Investor? Here's How To Get One

If you expect investors to revel at your super cool business ideas that's not going to happen and you know that - the reason is simple; the economic recession many people have become jobless and since many of them have turned to businesses, the investors have become more choosy. You’d get the real picture if you visit a financial institution or a bank looking for funding for your business. You would definitely find people assuring you that they are going to approve loans for you, but no one knows for sure when that is exactly going to happen and if at all it is going to happen. So, the bottom line is - if you want to start a business you have to have money of your own! But, isn't there any other way out?

Luckily for you, there is an alternative solution. We are talking about crowd funding. Crowd funding is comparatively new concept and has been devised keeping in mind the funding needs of small business owners. If you have a small business that needs an investor, you might not get funding from one particular source, but what if you get funding from several sources clubbed together? That is exactly how crowd funding works. Several investors would share the funding responsibly of your business and in return they are going to ask for a percentage of the profit or rewards. Sounds good? But how to get to these investors? Let's find out.

• The first thing you need to have is a business brochure that clearly outlines your business plan and also highlights the investment risks. The brochure should look professional and should have every minor detail that an investor might be interested in.

• Once you have a professional looking business brochure, you need to select a crowd funding platform that you think would be best suitable for your business. If you are not sure about which platform to choose you could try talking to a crowd funding expert and he would be able to help you out. You should also keep in mind that the business plan you have should be able to bring you at least 20% return on investment because otherwise investors might not be very much interested in your project. In any case, if I start a business does not make more than 20% return on investment, maybe it's not worth it after all.

• Once you have all of the above things in place, you get a little bit of marketing to reach out to potential investors. A tricky way of doing that is by offering juicy rewards. Of course your investors are going to have a share of your profits, but who doesn't love a bonus? The bonus you offered them could be in cash or kind. The basic idea here is to gravitate into your business and not let them be taken away by your competitors.

This post has been written by Jessica who is an expert in crowd funding studies and has assisted in the preparation of several business plans for angel investors.