Category Archives: Resource

Difference between fixed and working capital?

working capital management

Capital is like the fuel for a business. There are two main types: fixed and working capital.

Fixed Capital: This is the stuff a business needs to get started and keep running, like buildings and equipment.

Working Capital: This is the cash or convertible assets a business uses for day-to-day operations. It covers tasks like paying employees and bills.

In short, fixed capital is for the big things a business owns. Working capital is for everyday expenses. Both are crucial for a small business to keep the engine running. Both fixed and working capital play vital roles in a thriving business. But, they are distinct from each other. It’s important to grasp the variations between the two. Be aware of the assets your business holds in each category.

What is the meaning of working capital?

Working capital refers to the available funds and liquid assets that a business uses to pay for daily operational expenses. It includes the cash on hand and short-term investments. It also includes current assets like accounts receivable and inventory. Working capital is crucial for covering short-term liabilities. These include payroll, bills, and other operational costs. It provides a measure of a company’s short-term financial health and operational liquidity. Fixed capital represents long-term investments. In contrast, business working capital is a dynamic indicator of a business’s ability to manage its short-term financial obligations. It also shows its ability to sustain ongoing activities.

What does fixed capital mean?

Fixed capital comprises long-term assets like land, buildings, machinery, and equipment crucial for starting, developing, and sustaining a business. It provides the infrastructure for daily operations and supports future growth. In contrast, working capital, used for short-term needs, ensures a company’s immediate health, allowing it to address obligations like inventory restocking, timely payroll, and tax payments. Both fixed and working capital are essential for a business’s overall well-being, with fixed capital focusing on long-term stability and working capital addressing short-term operational requirements.

What are the differences between working capital and fixed capital?

Here are the key points highlighting the differences between fixed capital and working capital:

Key points Working capital Fixed capital
Nature of Assets Involves short-term investments in current assets. Includes cash, accounts receivable, and inventory. Involves long-term investments in non-current assets. Examples include property, machinery, and equipment.
Purpose and Use Geared towards meeting day-to-day operational needs. Supports operational goals and immediate business requirements. Geared towards establishing and maintaining the business. Supports strategic goals and contributes to the business’s foundation.
Liquidity Highly liquid and can be readily converted into cash or other forms. Emphasizes quick conversion to meet short-term obligations. Not easily convertible into cash or other forms immediately. Less liquid compared to working capital.
Duration Benefits the business for a concise accounting period. Addresses short-term financial needs. Serves the business for an extended period. Benefits the business over multiple accounting periods.
Consumption Essential for the ongoing operation of the business. Does not directly consume the business but serves it indirectly.

Understanding both fixed and working capital provides valuable insights into your business’s financial health. It highlights areas to be mindful of before making financial decisions. This knowledge helps you identify opportunities for streamlining or expanding your business. It also provides potential investors or lenders with a clear picture of your business.

Businesses often seek help in the realm of working capital. This leads them to explore short-term loans to cover expenses or ease growth. Small business owners often lack enough working capital. In these situations, they resort to working capital loans to bridge the financial gaps.

Alternative Business Loans for Unconventional Businesses

The current times have thrown many unforeseen and unmatched challenges at the business world. Some economists also expected the world economy to come to a complete standstill. Yet, most economies across the globe remain strong. It’s clear to see that many businesses have grown, changed the way they work, and diversified their products and services. Some are doing this to survive, while others are seizing the opportunity. As an alternative business lender, we take pride in the fact that some of our clients found immense value in our services during these challenging times. Some used the funds to sail through the toughest days. Many have used the funds to evolve their businesses into something “pandemic-proof.”.

While much keeps changing within the business environment, the same cannot be said about traditional business loans. Adapting to new ways of doing business and less conventional businesses is something that traditional lenders are yet to catch up with. If you own an unconventional business, chances are that your requirements for a business loan may be fulfilled by an alternative business lender. However, this side of the industry isn’t as organized as the banking system. As a result, it is often advised that borrowers choose alternative lenders. The last two sections of this article address that concern.

What’s your Business Model?

Alternative Business Loans for-Unconventional BusinessesA business model is a framework around which a business functions; this framework may suggest the way in which products and/or services are curated, presented, and sold to consumers, how and where these are placed, and what strategies are used to best secure growth and profits. Some would say that there are a few hundred business models, and all businesses fit in one or more of these models. New business models can evolve as major changes in the market occur.

While businesses within every business model might be in a situation that could enable them to gain a lot from added capital, many less-traditional business models may not enable the business to qualify for a traditional business loan. And yes, this is indeed one of the situations in which an alternative business loan lender could be of great importance to the business.

Why Traditional Loans might reject you

A traditional business lender, like a bank, is likely to accept business loan applications from conventional businesses. For example, a supermarket chain or an automotive dealer. But the requirements and qualification terms of a business loan from such a lender can be very stringent. While the reasons for being rejected for a traditional business loan can be many, most borrowers are rejected for one or more of these reasons:

  • Bad credit scores or history
  • Recent bankruptcy
  • Less time spent in business
  • Poor cash flow
  • Lack of security/collaterals of enough worth
  • Incomplete documentation provided
  • The industry and sector your business falls within
  • An unconventional business model that’s not accepted by the policies laid down by the bank

How Alternative Business Loan Lenders could help

Alternative business loan lenders may choose to accommodate requests from all the businesses that a traditional loan may reject and provide a loan without considering the reasons why a traditional loan might have been rejected. But any experienced and trusted alternative business lender would have its own mechanism to gauge a business’ loan eligibility, and this may or may not encompass factors like the requirements laid down by traditional loan lenders.

We are a trusted and renowned alternative business lender with years of experience in the industry. We welcome business loan applications from any business that meets our basic eligibility requirements. Your business:

  1. Must have no open bankruptcies
  2. Must be generating at least $15,000/month in Gross Sales
  3. Must be in business for at least 1 year

If you meet these eligibility terms, we could provide you a loan even if your business or you:

  • Have a bad credit score/history
  • Have an unhealthy cash flow
  • Have been rejected loans elsewhere
  • Have no collaterals to provide
  • Belong to a high-risk business sector
  • Have an absolutely unconventional business model

Finding a Trusted Lender

An important part of taking an alternate business loan is to choose a lender for your loan, who’s worthy of your trust. Here’s what to look for:

  • Established and legitimate alternate business lenders typically have a prominent presence online and a well-designed, secured website
  • It’s generally easier to trust a lender when it’s easier to reach out to them – promptness in response to emails and phone calls can be of utmost importance
  • Look out for legitimate contact details being provided on the website and various other communications by the lender
  • Before you accept a loan offer, look for transparency – the offer should be easy to understand and must have no hidden charges.

Get an Alternative Business Loan

At Business Capital USA, we take pride in having established years of trust with our valued clients. We would love to work with you too! If you’re looking for an alternative to loans, you could simply submit your details through the online application that simply takes 2 minutes to fill out. A customer service expert will get in touch with you shortly after we make a preliminary assessment.

Loans for the Festive Season – Christmas and Thanksgiving

Festive Seasons of ChristmasIt’s holiday time for most of us, but for businesses, it is time to see a surge in growth. This is a great time to plan and reach the potential of immense growth with the right strategy for your business. Many businesses’ available funds are the limiting factor to reaching this potential. A good strategy often finds that borrowing for the right reasons at the right time can result in massive benefits.

People celebrate Thanksgiving and Christmas across the country. During this time, businesses experience a rise in demand. Businesses that experience such demand only sometimes fulfill expectations. Some businesses choose to use holiday or festive season funding options. Like many other products, they also see a sharp increase in demand. When planned well, these options can lead to a fruitful outcome.

Alternate Business Loans

We at BusinessCapitalUSA are a trusted and renowned lender of alternate business loans. Ideal for businesses unable to seek traditional loans or those needing a simplified loan application and transaction process. Our loans are available online or over the phone. In addition to business loans, our festive loans can fund businesses up to $2 million. They access information like eligibility and other important factors.

A festive season business loan can be credited by us in as short as 48 hours from application, provided that all information and documents provided to us are verifiable and reveal eligibility for what has been applied for.

Festive Season Loans for Bad Credit Borrowers

Credit score plays a decisive role in a borrowing transaction. The owner of a business having a bad credit history can opt for a business loan from a trusted and reliable lender.  

At BusinessCapitalUSA, we provide alternate business loans for bad-credit borrowers, independent of the credit scores that they may have. Our loans are available without a bias toward high credit scores, even during the peak festive season. This is because it is an income-based business loan.

When to Avoid Borrowing during the Festive Seasons?

It’s important and ethical to share examples of scenarios in which borrowing a loan during festival seasons is likely to be better avoided. Lenders at BusinessCapialUSA use borrowing, which can lead to a successful outcome. But in legitimate business practices,.

  1. Where possible, avoid borrowing at the last minute, as loan deals become more expensive. Planning and borrowing well in advance can have large benefits. Nonetheless, sometimes it is unavoidable; in such cases, a shorter-term loan is a good option to add less interest.
  2. Only borrow an alternate business loan when trustworthy lenders are available during the festive season. When choosing alternative business loans, it’s important to deal with legitimate and reputed lenders.
  3. It is advisable to avoid a festive business loan for non-festive season-related expenses. Sometimes demand forces lenders to increase loan rates, making them harder to repay.
  4. If your business doesn’t trend during festivals, it is best to take a loan suitable for your business’s needs.

Applying for Christmas Holiday Loans

Deciding to borrow funds for the festive season can be a great step towards successful growth. It can also lead to increased profits. We at BusinessCapitalUSA have simplified the business loan process for the holiday and festive seasons. We start certain verifications. We get in touch with you to work towards a solution to finance the needs of your business. The application for the loan is online and can be found right here.

Business Negotiations on Video Calls – Now is the Time to Master Them!

Business Negotiations on Video Calls – Now is the Time to Master Them!

The business environment has changed at the behest of a global pandemic and the changes are still continuing to get deeper and evolve in a new way, at the time of the writing of this article. While some changes would reverse eventually, a lot would not. It is quite likely that some meetings which had started to require that people fly half-way across the world to attend, would never be the same again – necessity turned these meetings into video calls and in many cases, people have understood that the video calls might just be more practical in many, if not all situations.

The most important ways in which negotiations change over video is:

    • a lack of eye-contact the way we are used to when it’s natural
    • higher possibility and convenience of the session being recorded
    • technical limitations and difficulties that may hinder natural communication
    • privacy and security challenges – we recommend paying special attention to ensure sensitive information is only communicated over secure channels of video-calling
    • possibility of some participants taking the meeting less seriously
    • a possible change in number of team members present

Prepare well to get your Video Call Right

This first step to getting your video-call based negotiation right, is to get the call working well, and to try and make sure everything looks and feels professional during the session. Apart from the audio and video quality and your connection’s stability, it can also be very impactful if you ensure that everything visible in the video frame is well let and only there if you intend it to be there.

For further information, you can check out this article by Wirecutter, for a fairly complete guide to make good professional video calls from your home.

Time to get going with the Call!

With everything else taken care of, it’s now time to discuss the immediate topic – the video-call based negotiation.

A negotiation is intended to be a win-win situation. Both parties involved must ideally benefit the most out of any negotiation. Some negotiations can be for a situation where one party just has no room to win anything out of it. Even in this rare negotiation, the aim should remain to ensure no or minimum loss to that party and given that, the best possible gain to the other party would be ideal, without any further loss to the former.

Keeping the above in mind, you as the participant (sole or lead or equal to any participant from your side) have the role to ensure a scenario closest to the above, while securing right benefits for your side, perhaps the best possible.

For this main part of our article today, we need to be using an example and being a loan lending company, we shall use an example of a scenario where you as a business partner, would with your second business partner on the other side of the video call, like to negotiate the right use of a business loan money that you just got approved for.

Keeping the Call Positive

Let’s assume that your business partner (let’s call him Mike) handles Finances and Human Resources at your company while you – and equal partner – handle operations and marketing. We assume a typical negotiation call where he has two of his team members with him at his end and so do you.

While a lot of negotiation tactics have come and gone, the most robust and timeless ones teach positivity. Keeping everything positive, calm and relaxed, has been shown to have a profound impact and leads to a more productive negotiation 10 times out of 10. Even researches conducted on negotiations involved in situations as extreme as the biggest crime scenes, support this fact so any book or expert claiming to teach you otherwise, might be misguiding.

We shall now further assume that Mike wishes to have the entire loan amount allocated to the recruitment of added staff members while you believe that a part of the loan amount needs to be spent to purchase new equipment, which can make the existing and new staff be much more productive.

If Mike were to push his point loudly, all you need to do, is soothingly ask him to explain his point and continuously make him talk more. As you keep helping him realize that you are listening to him and wish to understand his perspective more and more, his mind is bound to calm down and he shall like to talk with you more openly. This is the strong effect that positivity has on negotiations.

Understanding the Other Side

What you as a negotiation want, is to know as much of reality about the other side as you possibly can. Knowledge is power and when anyone believes that you really know them and understand them, they naturally tend to feel more connected with you and wish to work with you more.

Once in that negotiation with Mike, you establish such a genuine rapport, he shall be more confident on you and it is very likely that he is open now to trusting, that your solution also could be a way to help him make his desired final outcome be met. Your aim then, would be to help reach a situation where both your goals are met as beneficially as possible.

Improving Empathy

This is how a negotiation starts to naturally take its course towards your goals. You however often need to really “show” that you’re empathetic while you look to gain empathy from the other side. Demonstrating your understanding of the other side’s situation, actively listening and asking relevant questions, being aware of body language and emotions and positively responding to them are few of the best ways to do this. Eventually, tactful language can be used to garner empathy from the other side.

For example, when Mike says that 20% of the loan amount towards equipment can be allocated for new equipment, while you believe it should be closer to 30%, a good tactic to sought empathy would be, to complete listening and then say something like “a figure like 40% of the amount would be fair for equipment purchase, for the optimal output over a long term”. When you use words like “fair”, to represent your side, without terming the other side fair or unfair directly, the other side automatically is likely to feel that they are being considered unfair, and are likely to empathize with you eventually.

Taking Notes

Taking notes portrays interest and dedication, while the notes you take can also be useful in the future. When you seem to take notes of what Mike says laying stress on, he is bound to feel like his points are being taken seriously by you. This is always advantageous in a negotiation.

Further Reading
To find out more about doing well in business negotiations on video-calls, here are more resources:
1. Video Conferencing in Business Negotiation – Harvard Law School
2. Online Negotiation Strategies: Email and Video-conferencing – Mediate.com

3 Common Business Loans for Restaurant Owners

Restaurant Loans Options

Our Restaurant Loans 

1) Restaurant Working Capital Loans

  • Assists in maintaining a healthy cash flow
  • Covers operational costs of restaurants

2)  Restaurant Equipment Loans

  • Covers kitchen equipment upgrade or purchase
  • Funds cost of furniture for restaurants

3) Restaurant Inventory Financing

  • Help get through seasonal fluctuations
  •  Helps purchase additional inventory

*** Indulge in our restaurant loan delicacies for an affordable financing experience.

Rour of Women In Business

Women owned business

Women play a critical role in economic growth. Almost 85% of all purchasing decisions be it automobiles, home improvement products, consumer electronics, all are prompted by them. Their influence does not stop here; even small business industry is incredibly influenced.  Women entrepreneurs are on the rise; the volume of loan requests is rocketing. They generate more than $1.6 trillion in revenue. Let us have a glimpse of women-owned businesses in the USA.

  • More than 11.3 million firms are owned by women.
  • One in five firms with revenue of $1 million or more is woman-owned.
  • Between 2007 and 2016, the number of women-owned firms increased by 45%.
  • Women account for over 50% of all stock ownership.
  • The most women-owned businesses are Healthcare and social assistance.

Fantastic! This is a big and strong sign of growth. Today, women entrepreneurs are more confident than ever to borrow and repay their debts. We, at Business Capital USA, salute the rising women power and contribute to easy access to funding for women-owned businesses.

Source:-www.womenable.com