Given that, the idea of asking for referrals from customers and other businesses seems almost blasphemous, even though you need another party to get those referrals. Why, shouldn’t they want to come to you without you having to ask? The short answer? No. The longer answer? No way.

Businesses have their own issues and customers have busy lives, so even if they thought your company knocked it out of the park when you worked with them, they’re not likely to set up a referral relationship on their own. They’re not even particularly likely to refer one friend, family member or customer to you. Instead, you need to be proactive and work to set up a relationship that will help your business thrive.

Tips? We’ve got ‘em.

• Just ask. If you know a customer is delighted with you, hand them a few extra business cards and tell them you’d be glad to help out anyone else they know who might need your product or service. You can even offer them some small bonus for making the referral, which further encourages them to do just that.
• Create a two-way street. A fellow business won’t have any particular interest in referring customers to you unless there’s a reason for it. Whether you provide a necessary service for them or are willing to refer customers back, you’ll need to sweeten the pot.
• Cement the partnership. Especially in the case of a business, this is important. You want your partner business to think of you every time a customer comes in with a need you can satisfy. Make it as official as possible and hammer the idea home.

Ultimately, no business ever truly goes it alone. By asking for referrals, you’ll ensure you’re getting more business and qualified business, which is a definite win for your company.

How do you get referrals at your small business?

Join Direct Capital On Facebook | Follow Us On Twitter | Subscribe To PointBlank By E-mail

Photo credit to iStock

Here are the best places to look:

Local equipment vendors.  This should always be the first place you start looking for equipment.  Shopping local gives you the opportunity to check out the equipment you’re purchasing face to face and “kick the tires,” so to speak, before you sign on the dotted line.  Scoping out local vendors will also help give you a good idea of the going price for the equipment you’re looking for.   Consider the price difference between buying a used versus a new piece of equipment.

Go online.  Once you’ve done some research at your local vendors, you should take your search online.  Stop over at EquipmentEngine.com or try your hand at an online auction at ebay.com or Ritchie Brothers.   Do some research and find some online retailers for your specific industry as well.  If you’re looking for dental equipment, dentalassets.com might be a good bet or if you’re in need of construction equipment check out Mascus.com.  You may be surprised at how many very niche equipment sites there are out there.

Hire an Expert.  If you’re strapped for time, you may consider hiring an expert to help with your equipment purchase.  Some of the larger online marketplaces have dedicated account managers that can take care of the entire process for you. Though there will definitely be an added expense, in some cases the price of commission is worth it to get the piece of equipment you need quickly and easily.

A couple of words of caution:

If purchasing online, always be sure to read reviews from other customers that have purchased equipment from the site you are considering.  This could save you the headache of dealing with an unreputable equipment vendor.  Also, it’s always a good idea to inspect your delivered piece of equipment once it arrives to ensure that it didn’t incur any damages during transit.

Once you’ve found that perfect piece of equipment, you’re likely going to need to secure some financing.  As always, Direct Capital is here to help with our excellent equipment financing programs.

Where’s your favorite place to purchase equipment?

You have a customer interested in purchasing your product, which is great news for you. You’re all ready to get them dotting their i’s and crossing their t’s on the final contract, but you know they can’t afford to make the purchase without vendor financing. What happens if they can’t get it?

You’re out a sale, is what.

This is where a powerful argument for a relationship between a vendor and a financing firm can and should be made. By forging an agreement, formal or informal, to refer customers to financing companies you like and trust, you can ensure that customers short on cash but long on desire to buy what you’re offering will be able to connect the dots. It won’t work out 100 percent of the time—nothing does, after all—but it gives you a leg up on the competition and removes both excess time and headaches from a process that’s otherwise chock full of ‘em.

Of course, you don’t want to run headfirst into a relationship with a finance company without doing your due diligence. Let us give you a few points to consider before you shake hands.

Tips For Partnerships

• Look for flexibility. Your customers may come from a variety of backgrounds, credit scores and cash flow. Locking in with one partner who refuses to adjust terms is not going to help you overmuch.
• Consider speed. If your partner has a rigorous approval process that involves a mountain of paperwork, customers will balk. Don’t go for speed at the expense of credibility and honesty, but consider it a factor.
• Go for trust. If this financing company has speed and flexibility but strikes you as skeevy, steer clear of them at all costs. If you’re lucky, you’ll be working with them frequently, and you want a company you’re comfortable with.
• Choose someone who works well with customers. All your hard work enticing customers will be for naught if your financing partner treats them rudely and ruins it for you. Be sure to scout their reputation ahead of time.

Direct Capital has had our share of partnerships with vendors over the years, and we try to fit all three criteria. How often do you need financing for customers?

Join Direct Capital On Facebook | Follow Us On Twitter | Subscribe To PointBlank By E-mail

Photo credit to iStock

Direct Capital has seen some growth in April on our end as well.  The number of opportunities that were submitted for financing is up 20 percent over last April, while the number of those that were approved is up 25 percent (a 0.7 percent increase from March) – indicating that the quality of applicants and perhaps business credit-worthiness is improving.

So what does this mean for the industry?

ELFA President and CEO William G. Sutton, CAE, has said: “April’s new business volume and credit quality metrics appear to provide evidence that the equipment finance sector continues to gain momentum. Recent anecdotal information from ELFA members gathering in Washington, D.C., for a series of leadership meetings in mid-May supports the observation that the demand cycle for capital equipment parallels the broader economy in that both continue to strengthen, albeit slowly.”

Though the economy may still be struggling, the current low interest rates have made equipment financing easier and more attractive for many businesses.  Alternative lenders are making financing even easier, as businesses can avoid jumping through hoops at their local banks, and are much more likely to work with a less than perfect credit score.  With opportunities like this, it’s likely the number of leases will continue to rise.

If you’re ready for equipment financing, be sure to check out the equipment financing programs Direct Capital has to offer.

Have you financed any equipment lately?

At its most basic level, an MCA is just an advance on future credit card receipts, one that allows you to get some money in the here and now in exchange for a daily portion of those future receipts.

I talked to Direct Capital Director of Client Services Scott Lynch, who previously answered questions and debunked myths for traditional working capital loans. What follows are two of the myths he encounters most often when it comes to merchant cash advances and his reactions.

Myth 1: I Can’t Afford It

“Well, yes you can, because it’s based on cash flow daily. Traditional loans require payments regardless of your businesses ebb’s and flows, a cash advance only takes payments WHEN you collect payment from your customer, true point of sale advance.”

You have to know how much is coming out of your daily sales receipts, yes, but this is a great way to remove the hassle and worry from paying off this particular loan. You get an advance on your receipts, and if your receipts roll in nicely, you end up paying it off quickly.

Myth #2: It Takes Too Long

“Fact is, Merchant Advances typically fund in 2-3 business days. As with all commercial financing, the quicker the customer submits info, the quicker they receive their funds.”

We’ve talked before about how working capital loans give you a quick turnaround from application to cash. A merchant cash advance can be even faster, allowing you to take on that project or urgent need and parlay your increased sales into a quick payback on the advance. Hard to argue with that.

Have you ever used a merchant cash advance at your business? If so, let us know what you thought.

Join Direct Capital On Facebook | Follow Us On Twitter | Subscribe To PointBlank By E-mail

Photo credit to iStock

Computers are necessary for data entry, e-mail, word processing, SEO, online marketing, advertising design and a thousand other tasks in between. In today’s modern world, it’s nigh impossible to survive without them.

I can see you nodding along, reader. So why do so many small businesses put off computer upgrades indefinitely?

The Why

For most small businesses, it’s simple. They figure they can get by with older computers, overcoming any slowness and loss of productivity and using that money toward better purposes. There are certainly times where this approach winds up making a lot of sense, especially if you don’t have a lot of money to begin with.

There’s also the piecemeal approach. That’s where you replace machines one at a time, which gives a handful of employees a boost while the other lag behind. Unfortunately, it’s too often the CEO who gets the new computer instead of, I dunno, the tech team. That’s not a smart way to upgrade.

Here’s three good reasons to take care of your computers now, before they get older.

3 Reasons To Upgrade

• The loss of productivity. Every minute you spend waiting for a slow computer to load, for it to unfreeze or just through the processing time is a minute you’re not working. On a really slow computer, you could be talking a half hour a day down the drain.
• The benefits of an upgrade. You can run newer programs, boost employee productivity and communicate more quickly. Those are all benefits when you’re trying to stay ahead of the pack.
• It’s not as expensive as you think. You can snag laptops for your employees that are plenty fast and handle all the basic functions your business needs for $300 or less, and if you’re a really small firm, that means it can cost you as little as a couple of thousand dollars. Why bother fighting with outdated machines when you can make a change for such a small investment?

If you need help financing those upgrades, be sure to check out Direct Capital. How old are your computers?

Join Direct Capital On Facebook | Follow Us On Twitter | Subscribe To PointBlank By E-mail

Photo credit to iStock

The next question for your business before you put your looping signature on the bottom line and enter into a contract that will get you your money and bind you to re-pay it is how long you’ll take to do so. This is an important and oft-overlooked factor.

If it’s an extremely short term, you can pay it down without interest rates creeping up on you or having to remember payments for two years. If it’s a longer term, you can spread out the impact. There are definitely upsides and downsides to both approaches, and it’s helpful to know what they are well before you obtain lending.

Short Terms

• The advantages of a short term loan is that you can pay everything back in short order. If you’re expecting quality cash flow or increased business due to the equipment your loan is getting you, it might be worth pulling the trigger on a shorter term. That means less interest over time and not having it hanging over your head for the long-term.
• On the other hand, a short term means bigger payments and less wiggle room. It’s not a good idea unless you’re certain you can pay off the loan balance quickly.

Longer Terms

• A longer-term loan has the advantage of time. By paying off the loan over the long haul, you may pay more in interest, but you’ll pay less each month. This can be critically important for a business with cash flow challenges, or if you intend to hold on to the equipment for the long haul, as well.
• The disadvantages of longer terms mostly have to do with interest, as you might imagine. Even quality rates can seem oppressive over the course of many years.

Your best bet is to sit down with your team and your finance partner and hash out what term length makes the most sense for your particular business. There’s no one right answer, but there’s also no one wrong answer. Keep that in mind.

If you have questions we haven’t covered here, leave us a question in the comments or call and talk to one of our finance managers today.

Join Direct Capital On Facebook | Follow Us On Twitter | Subscribe To PointBlank By E-mail

Photo credit to iStock

The study, which surveyed 6,000 small business owners all over the country in the span of a two month period, asked each participant to evaluate overall government friendliness toward small businesses and whether they would encourage a fellow small business owner to set up shop in their state.

Idaho, scoring at the top of the list with an overall A+ rating, ranked high in all areas including overall friendliness, ease of starting a business, regulations, health and safety, hiring, well publicized training programs, and low tax rates.  Interestingly, women owned businesses in Idaho felt significantly more supported by the state government than did the male business owners.  Oklahoma came in just below the larger state of Texas, which is home to three of the top five cities (Dallas-Fort Worth, San Antonio and Austin), ranking #3 with the overall “friendliest” score. 

Though ranking high in training and networking programs for small businesses, Rhode Island is the nation’s lowest in overall “friendliness”.  California, home to the three lowest cities on the list (Los Angeles, San Diego and Sacramento), also had some of the worst tax codes, earning it an overall “F” score. Hawaii and Vermont joined Rhode Island and California at the bottom.

  “Asking entrepreneurs to rank state friendliness to their businesses is a powerful resource for helping policymakers understand the needs of business owners and for helping aspiring founders understand the full dimensions of their business environment,” said Dane Stangler, director of research at the Kauffman Foundation.

Interestingly, Florida, a state ranking high on the 2012 Business Tax Climate Index, ranks fairly low in overall friendliness with a “C” rating.  The “unfriendliness” highlights the fact that other factors, like ease of starting a business, hiring costs, and training programs, are just as important to the success of small businesses as low tax rates.

Unfortunately, our area of New England ranked came out as one of the least friendly for small business.  How friendly is your state toward small businesses?

Yet there’s one tax benefit out there, one we absolutely love, that you can get through the end of 2012. In fact, it’s in your best interest to get it, because the amount you’ll be able to get is going to fall precipitously in 2013. It is the mighty Section 179 tax benefit.

We bring this up again and again because we like helping businesses out, and this is one of the biggest aids you can get. Imagine being able to get $139,000 in equipment without having to pay taxes on it. That’s a potentially enormous savings, and it might make the difference between being able to afford that equipment and having to hold off. Most businesses, after all, are operating in a razor thin zone where a few thousand dollars in tax breaks can solve a few problems.

Re-printed below, some of the advantages of Section 179 worth exploring.

The Advantages

• It still can save you a lot of money. Being able to write off up to $139,000 in equipment is significant unless you’re some sort of multi-billionaire small business owner, in which case you don’t exist. That’s down from previous years, but it’s still a lot.
• It’s going through the basement and will keep going next year. If you think $139,000 is a steep drop, wait until 2013, when it plummets to $25,000. It hasn’t been that low since 2002, and that’s basically less than one-fifth of this year. If you’re going to go for equipment, make this the year.
• Many different equipment types are eligible. There’s computers and software, business vehicles, office furniture, and machinery, among others. Chances are if you have an equipment need, you can apply for the deduction.
• It’s not a difficult deduction to figure out. If you have any issues at all, you can turn to our ebook and calculator to fill in the knowledge gaps.

If you’re thinking about getting a piece of equipment but you need financing, never forget that Direct Capital can help you out on that front. Do you intend to chase Section 179 tax benefits before they plummet in 2013?

Join Direct Capital On Facebook | Follow Us On Twitter | Subscribe To PointBlank By E-mail

Photo credit to iStock

The owner of the Beachwod, Ohio Southern comfort food restaurant Phil the Fire, Davis is a cheerful man with a thriving business which draws hungry customers from as far away as Akron, Cincinnati and Pittsburgh, Pennsylvania. He speaks confidently of future expansion to other parts of Ohio and beyond.

It wasn’t long ago that this would have seemed like an impossible dream to Davis, who saw his business come crashing to the ground under very bizarre circumstances.

The Story

In 2001, the first Phil the Fire opened up in Ohio. In Davis’ words, “people started coming from miles around” to sample the all-you-can-eat Sunday buffet. Encouraged by the hot start for the new business, Davis opened a sit-down restaurant in 2002 and a second location in November 2003, bringing his traditional Southern cuisine to more and more people.

In 2004, Davis’ primary investor for Phil the Fire, Kirk Wright, was arrested for defrauding investors which included NFL players of some $185 million. With his investor facing a federal prison sentence, he no longer could afford to keep the locations open and had to fold.

“It was not a fun thing to go through, closing and having to deal with the loss of the livelihood,” Davis said.
For the better part of the next seven years, Davis worked tirelessly to re-open Phil the Fire, attempting to secure the financing he needed and find a new location. In June 2010, those efforts finally paid off when he was able to negotiate for a new restaurant in June 2010.

With financing through Direct Capital, Davis has been able to begin paying down his debt on the new restaurant, which employs about 100 people. Business is already booming, and the financing has allowed Davis to hit the ground running and keep up a sprinter’s pace.

“I have nothing but high marks for Direct Capital,” said Davis, who called Finance Manager Edward O’Donnell “excellent” to work with.

What Lies Ahead

With the good times rolling and Davis feeling battle-tested, you can forgive him for the optimism. After all, he’s got hundreds to thousands of loyal customers who have his back, and a national void for quality comfort food.

“They come from different parts of the country and they’re always asking, ‘when can I get a Phil the Fire in my area,’’ Davis tells me. There’s a pause, and you can almost hear him smiling over the phone. “Soon.”

Join Direct Capital On Facebook | Follow Us On Twitter | Subscribe To PointBlank By E-mail

Photo credit to iStock