Peer-To-Peer Lending

Recently I had a good friend call me for some financial advice about credit card debt.  I’m not going to try and claim that I’m a certified financial planner, but I’m not afraid to offer my financial opinion.  My friend has run into a situation that has become very common place among many Americans, mounting credit card bills.  He was specifically wondering if there was an easy way to lower his interest rate and begin paying down the balance after his bank didn’t have any solutions.  I suggested taking a friendly approach to financing and brought up peer-to-peer lending.

Alternative Lending Sources

What is the proper measure for creditworthiness in this day and age?

Apparently, it is no longer simply the credit report or the verdict of one’s local banking institution. There are so many individuals who fall short of traditional standards of creditworthiness that the marketplace has naturally made room for non-traditional lenders. Besides the controversial subprime mortgage lending industry that most people are by now familiar with, there is a increasung trend in person-to-person lending organizations. Websites like Prosper.com facilitate lending transactions between individuals and other single or small group benefactors. Using such a service empowers people who may not otherwise receive loan funding to finance their dreams and goals.

Free Link!

Today I’m simply going to give you something for free that should have an immediate impact on your business well being.  Go to:   http://thesmallbizcollege.com/freeaccess.php.  This is a website I created to assist small biz owners in their endeavors.  I have over 600 people that have paid membership dues for access so “consider yourself lucky”.

You are welcome to give access to this site to any and all of your friends and business associates.  This free link will only work until August 10, 2009.

The FACTS About Your Credit

Important information about your credit

As an adult almost everything you do revolves around your credit.  Your ability to purchase a home, a car, a big screen TV.  It also affects your insurance rates, renting your apartment and even getting a job.  Heck, besides marrying my wife for her sheer inner and outer beauty, the next biggest thing that attracted me to her was her credit.  YES, that’s right!!!  It was that important she handled her finances how I did and was one of the first questions I asked her.  We laugh about it now but it caused a definite stir in the beginning.  So lets talk about credit.

First there are 5 things that are factored into the algorithm used to calculate credit.  They are:

* Payment history
* Amounts owed
* Length of credit history
* New credit
* Type of credit used

Is the Economy Right to Start a Small Business?

Timing Timing Timing

If you are thinking about starting a small business now is as good of time as any even with the current state of the {financial crisis|economy}. Now why is this you might be asking yourself? If money is so bad for everyone what is going to make the want to come out and buy from you? Read on to see that the urge to start your own small business is a very savvy thing to do even in hard economical times.

Any successful small business venture is going to need a very quality and well written business plan. If you do not have a solid Small Business Plan in place they you are setting yourself and your business up for failure. When you are starting your own business you not only want to find something that you love you want to be able to fill a niche product that is going to help make your business stand out from the crowd.

Standing on shoulders — how great is your business?

Learning experiences

My best business lessons come from my clients. Central among these lessons is that good businesses make money, but great businesses build communities that make good business possible. “Great businesses” doesn’t mean only big public corporations. Private businesses are not only the foundation of our economy – they are essential to civic infrastructure. No other group of community leaders brings to bear the skills and entrepreneurial drive of the man or woman who owns a business.

A company that invests in its community not just money, but the talent and passion of its people, especially its owners, positions itself to move from being a success to being significant. “Being a good corporate citizen is good for business. Companies that give by donating money, products and services or volunteer time gain recognition by supporting their communities. Corporate giving can increase your company’s visibility, reputation for goodwill and employees’ sense of purpose.” — The Denver Office of Strategic Partnership’s Business Good Citizenship Kit.

The Missing Inc.

Properly naming your company

A friend referred a new business client to me recently. I’ll call the corporation “Guys and Dolls.” Only problem is its legal name should be “Guys and Dolls, Inc.” or “Guys and Dolls Company” or something which indicates it is a corporation. Similarly, if Guys and Dolls was a limited liability company, it would need to include LLC or such in its legal name.

The owner of Guys and Dolls formed the corporation through the Colorado Secretary of State, which warns that corporate designators are required under state law but still allows a user to file without one. Guys and Dolls compounded that incorporation mistake by using the Inc-less name to refer to itself in all of its business dealings.

Heavy Duty: More Liability Traps for Business Owners

Forewarned is forearmed

Unless you were daydreaming during history class, in high school you learned that the birth of modern limited liability business entities, namely corporations, was a key factor in the Industrial Revolution and America’s emergence as a world economic leader. An investment of capital that risks only that capital, not the investor’s other assets, has been at the heart of capitalism ever since. This is especially true, but often challenging, in human-owned businesses where the people who invest the capital are often investing blood, sweat and tears as business management, too.

Typically, the law splits management of a corporation into two functions: the officers (President, Secretary, Chief Cook and Bottle Washer, etc.), who run the day-to-day operations, and the Board of Directors, which supervises the officers and keeps a long term view in mind. Yes, I know that if public company Boards of Directors really did that, we wouldn’t be in our current economic pickle, but that’s not today’s subject; my concern is that people in private companies don’t keep track of the hats they wear (owner, officer and/or director) and the consequences that go with wearing them.

It’s Legal Week

Hello everyone.  After a long holiday week it’s time to get back to work.   One of the things us business owners always seem to slack off on is the legal end of running our business.  Therefore, I have asked my friend, Jim Thomas, of Minor and Brown, to write a few articles that I am going to portray on the blog this week.

Jim is one of the most knowledgeable business attorneys I know.  He has helped hundreds of business owners get out of sticky situations, not to mention preventing them from being there in the first place.  Stay tuned and read em all.  They’ll save you tons of time and money in the future.

Best,

Darrell

Debt Verses Equity Financing

One of my readers has recently posed the question “in what cases should a manager look at equity verses debt financing”.  First let’s make sure we understand the difference between the two.

Debt financing is exactly what it says.  Incurring debt (taking out a loan) to finance the start-up or purchase of a business.  You can also take out a loan to grow or expand a current business.  Debt financing can take on many different forms.  SBA loans/lines, traditional business lines of credit/loans, equipment leasing, etc.  You can also find alternative debt financing through vehicles like credit card advance funding, hard money loans and hedge fund loans just to name a few.

Equity financing typically comes from an angel investor, a venture capital firm or the like.  When a group or individual makes a cash infusion into your business in exchange for an interest in your company, it is an equity investment.