Lideresm Business

A business loan is an agreement between your business and a lender in which you agree to pay an interest rate on a specific amount of capital borrowed over a specified period of time. As we have discussed earlier, a business loan works very much in a similar fashion to a mortgage. You are lent money and required to pay back the principal and interest. However, there are a number of differences between business loans and other types of loans. As we saw earlier, business loans often come with a substantial number of covenants. These covenants act as a guide of factors that your business must adhere to throughout the life of the loan. Sample covenants include, but are not limited to:

Maintaining profitability
Maintaining a positive cash flow that exceeds the interest and principal repayment by a certain factor.
Maintaining the value of collateral
A stringent use of how the business loan is to be used.
Maintaining a strong credit score (both for the business and personally).

Banks and finance companies have a wide range of latitude when determining whether or not to make a business loan, how the loan proceeds can be used, the interest rate, and the repayment period. Of course, like with anything in this world, you are free to reject an offer proposed by a lending bank. The only factor that cannot be taken into account when making a credit decision is someone’s race, religion, or other similar characteristics.

In regards to the mechanics of the business loan, a bank or finance company can issue the funds in a number of different ways. First, they could simply write you a check to be deposited into your bank account. However, this is become less frequent as banks want to ensure that the usage of debt funds is in accordance with how you said you would use them. In a different scenario, you could have the bank make purchases of items on your behalf. For instance, if you took out a $50,000 loan to buy a piece of business machinery, then the bank very may well directly pay the vendor for the equipment rather than you paying the vendor. This ensures the bank that the funds have been used appropriately and that the proper collateral is in place.

As has been one of the topics discussed throughout these articles, credit scores are extremely important when applying for business loans. With lending standards tightening among all banks and financial institutions, it is imperative that you have a credit score that implies that you are a worthy credit risk. A credit score is calculated based on a number of factors including your past payment history, your current debts, how long you have had credit, and whether or not you have any delinquent accounts. Today, most lenders want to see a credit score above 680 if they are going to grant you a business loan.

When looking for business loan, you should pull all three of your credit reports from the three major credit bureaus (Equifax, Trans Union, and Experian). Each bureau maintains its own records so it is important to ensure that the information on each of your reports is correct. Most banks now look at all three different reports to make sure that there are no discrepancies.

If your current credit is not in a good state then you may want to talk to your accountant or a properly licensed credit counselor before applying for a business loan. They will be able to assist you in making appropriate decisions regarding how you can improve your credit score so that when you do apply for a business loan – you will have no issues pertaining to your credit.

As we have discussed earlier, if you have an outstanding business project that needs financing but you do not have an appropriate credit score then you may want to seek alternative methods of finance. This can include bootstrapping your business or seeking equity investments from private investors. You may also want to go to familiar sources such as family and friends as potential lenders/investors in your business venture.

Many small business owners have been disappointed when their applications for small business loans were disapproved by banks under the Small Business Administration’s program for America’s Recovery Capital. According to an article written by Robb Mandelbaum in the August 12, 2009 edition of The New York Times Online, “the program is off to a slow start. ” It seems that most banks are reluctant to approve applications for small business loans.

Mandelbaum reports that the Small Business Administration’s program has $255 million to give away, enough to give small businesses 10,000 loans reaching as much as $35,000 each. However, two months after the program was launched, there have only been 1,127 small business loans released, with a total of $36. 8 million.

Sources are saying that banks are not very keen on participating in the Small Business Administration’s program because giving the small business loans would not be very profitable for them. Paul Merski,. chief economist of the trade association Independent Community Bankers of America, said, “There’s not a lot of profit motive in a $35,000 loan stretched over six years. ” Bob Seiwert from the Center for Commercial Lending and Business Banking at the American Bankers Association reveals that, because of strict underwriting standards, servicing the small business loans becomes even more expensive.

The banks have also found more ways to restrict the approval of small business loans with the Congressional restrictions on loan eligibility. According to Congress, in order to qualify for the Small Business Administration loans, small businesses need to be both struggling and viable. That means the business should have had an “immediate financial hardship” such as a 20 percent decrease in revenue. However, the business must also be at least two years old with proof of positive cash flow in one of the previous two years. It should also submit a two year cash-flow projection proving that it will be able to afford loan payments.

Because of the Congressional restrictions, banks are more likely to approve small business loans from their existing clients. Merski said, “From a financial perspective, it really is a loan that makes sense for an existing customer. You’re not going to have to put out a lot of resources to do a very costly underwriting. You know the business. ”

Those who are working in support of small businesses are very much disillusioned. An example is Alex Cooper who is a counselor at the Pima Community College Small Business Development Center in Tucson. He said he had assisted almost 30 small business owners with their loan applications but none of them had been approved. “It’s a disappointment. I thought the banks would be more interested in the community and try to help small businesses,” he said.

When the applications for small business loans are disapproved by banks under the Small Business Administration’s program for America’s Recovery Capital, small business owners still have another option. They can get the equivalent of small business loans from their credit card services.

Credit card services provide their clients with the ability to accept payments through credit cards or debit cards in person, online or through the phone. Clients who have established a certain minimum in average monthly credit card sales are qualified to apply for cash advances that are like small business loans. Payments are automatically deducted from future credit card sales.

If you are a small business owner, you do not have to go through the hassles of applying for small business loans with banks who are reluctant to participate in the Small Business Administration program. Get your trouble free small business loans from your credit card services instead.

Ultimately, venture capital firms are looking to make a divestiture of their share of your business within a three to seven year time line. This is not always the steadfast rule, but you need to remember that venture capital firms are in the business of providing their investors with significant returns through their pooled capital funds. When looking for venture capital is imperative to discuss the exit strategy wanted by a potential VC firm.

Many people feel that all venture capital firms are seeking to grow your business with the intent of having an initial public offering (or “IPO”). However, this is not often the case. Many venture capital firms, after a three to five year period, will seek to divest the profitable business to a larger firm that is seeking to consolidate or remove a competitor. With the recent economic downturn, the demand for new initial public offerings has waned among individual and institutional investors. As such, many venture capital firms have begun to act like their private equity counterparts by focusing on selling the business to a third party.

However, taking a company public often provides a much higher return on investment than selling the business to a third party. Additionally, publicly traded firms have a certain prestige attached to their name once this process is complete. Finally, and IPO produces additional visibility for your brand name as more people (mostly individual investors) become aware of your business. The drawbacks of engaging an initial public offering is that despite the higher return on investment, the senior officers are typically required to stay on for at least one to three years after the IPO is complete. While this is not a law, most investors will not purchase IPO shares if they know that the person that runs the business intends to leave very quickly. Much like venture capital firms, individual investors are looking for strong growth from your company.

Sony Ericsson Vivaz business mobile

Sony Ericsson have now introduced the new Sony Vivaz mobile phone as a successor to their flagship Satio mobile phone.

Here we review it to see how it compares and also mainly to see if it is a realistic and quality business mobile phone.

The main selling point of the phone is the camera and the video camera, the camera is 8. 1 mega pixels and the video camera can record 720p HD video and also has 8 gigs of memory card storage.

This touchscreen business mobile phone has been fairly well designed and sits nicely in the palm, but it does look plastic and does not have the same quality look or feel as a lot of the current smartphones. It has a great range of social networking and multi-media features, the Sony Ericsson Vivaz is set to give the likes of the Nokia X6 and the LG InTouch Max GW620 a run for their money.

However it is very different to the popular business mobile phones such as the Blackberry’s, the i-phone and the HTC Desire – it probably suits the younger, more media savvy business person best.

Here is a short video review of the Sony Ericcson Vivaz

It’s a lightweight handset and pretty slick, so slick in fact that  I found it all too easy to drop.

The Sony Vivaz is available in 4 different colour options, the best selling are the silver and ruby options.

The touch screen is fairly good, not as sensitive and accurate as the i-phone or the HTC Desire but it is not far off.

On the front of the phone there are the call and end buttons as well as the menu button, with volume/zoom and two camera buttons on the right side panel, as well as the power/lock on the top.

The latter can be a bit fiddly to hit when holding the Vivaz in just one hand.

Consistent with the focus on the younger business user there is a 3. 5mm headphone jack to allow you to plug in your own headphones – a great plus for heavy media users.

The Sony Ericsson Vivaz comes with a charger plug, separate USB to microUSB cable to connect to the plug or to your PC, a pair of Sony Ericsson headphones and a standalone stylus – not so useful I felt.

The headphones that come with the phone have a built in microphone so can double as a hands free kit for the car.

The Symbian S60/S1 operating system is commonly found on mobile phones like the Nokia 5800, N97 and X6 but the phone is still very typical of a Sony Ericsson.

The menus are clear and easy to navigate but the sub menu’s seem fairly cramped. You can customise the home screen with the functions that you use the most which reduces the amount of navigation that you have to do.

Sony Ericsson Vivaz

The default set up offers a row of five widget tabs across the top of the screen which can be customised as you wish – i really liked this function and felt that it was useful for all users not just business mobile phone users.

Although it’s nice to have the customisation options they are not as varied and wide ranging as the options on other business mobile phones such as the HTC Tattoo and LG InTouch Max GW620, where a wider of widgets are on offer.

To lock/unlock the keys you need to hit the lock/unlock button and then select yes/no on screen – personally I liked this as i hate it when I just unlock the phone by accident so appreciate the two button process but I know that this will annoy other users.

The only difficulty is that it is quite easy to press the lock/unlock button too hard and accidentally switch the phone off. Also annoying is the length of time taken for the Sony Ericsson Vivaz to close down, and starting up again isn’t exactly lightning fast.

It was also far too easy to forget to choose any option from the menu and just leave the keys and screen active in your pocket or bag, from which all keys and screen can be accidentally pressed due to the resistive screen.

The Sony vivaz auto-rotate function takes a second or two too long to work.

As well as this the handset’s multi-tasking feature is a little tricky to use as things do not close down easily but I did find it easy to switch between functions.

Simply using the menu or end buttons keeps them open in the background, so you end up with several unnecessary things running, slowing the handset right down and taking away all the advantages of the Vivaz’s fast processor.

Like the Blackberry Apps World it is easy to download new apps for the home screen with the PlayNow app store but there are not as many good functional apps as the i-phone or Blackberry have and they are not as well focused for the business user.

The apps provided include; music, game and wallpaper downloads as well as other apps, but they’re generally not cheap and there are very few free options, I found this just disappointing compared to the other mobile phones on the market.

It’s very easy to get to the dial pad on the home screen and it is also easy to access the contacts function as you can access it through the call button and through the menu.

The quality of the sound on calls with the Sony Ericsson Vivaz is pretty good; both the caller and the recipient’s voices were clear and comfortable to hear, although there was a little static on the Vivaz’s end.

The individual contact entries are very good for business users as you can enter multiple numbers and email addresses as well as company information, job title and photos to help you include all necessary info which can easily be forarded onto your colleagues.

Favourite contacts can be saved to one of the five home screen tabs for quick and easy access. but you can’t synch your phone book with your social networking profiles.

There are a good range of messaging options including SMS text messaging, email options and an SMS conversations view – which basically shows your texts in another format and it also has a range of granular message settings.

It was very easy to set up an email account on the Sony ericcson Vivaz – I just registered the email address, entered in the username and password and the phone set up the rest.

It was also pretty easy to set up exchange email, It was quick to synch with the server but we did have to input the settings manually.

A significant problem for the business mobile phone user is that the phone only synch’s email messages each time the inbox is actually opened which is not great – it would be more more effective if push mail was configured by default as business mobile phone users really need live mail.

Typing is OK as I briefly mentioned earlier, but the touchscreen is not as good as some of the other smartphones on the market, also there is no autocorrect function, which is a real annoyance for minor mistakes. There is a dodgy stylus but none of us really have time for those anymore and have higher expectations since the i-phone’s release.

The Sony Ericsson Vivaz only connects to the internet when you open an application requiring the internet, not a problem but not as convenient as the leaders of the business mobile phone market.

It does work out well if you’re on a budget in terms of minutes but frustrating if you have unlimited web access as part of your contract.

It also kept asking me what kind of internet connection I wanted to use every time i used an application that was reliant on internet access, this wasted time and was frustrating for heavy mobile phone users.

Web browsing was frustratingly slow, the larger, more media heavy web pages took up to a minute to download. Connecting to the internet through the Wi-Fi connection was more consistent but even slower.

There is a good zoom function for web browsing that allows you to focus in on parts of web pages that you are interested in but there was a lot of scrolling back and forth as with most mobiles with a screen of this size.

Another issue is that the Sony Ericsson Vivaz isn’t Flash compatible, so Flash-based sites will render only as plain text.

There are good web connections and apps for Youtube and BBC as well as some social networking apps which generally worked well, but again the constant need to log in quickly wore me down when testing the web abilities of the Sony Vivaz.

Because of this I really cannot recommend this phone for business mobile phone users as almost all will need good email and web access.

Moving on. . . . The camera is actually a high quality one with 8. 1MP as well as a good video camera and compares well to a mid range digital camera.

There are two separate buttons to open the video and simple camera functions, as well as this there is an on screen function to switch between the two.

There’s no manual focus but you can select between specialist options for specific types of shots; macro for close-ups, infinite mode for landscape shots and portrait mode and as well as these options there is an auto focus option.

The camera handled colours well, even in incandescent light and was one of the best mobile phones that i have tested for it’s camera abilities so far.

Overall, this is not a phone that i can recommend for business mobile phone users at this price point. If you do have a specific need for a relatively good camera and video camera as well as simple email and web options then it may be fit for your purpose but considering what else is currently on the market i cannot honestly push this one.