business finance – Industrial Talk

Mr. Brannon Fisher with Simon Quick Advisors talks about ESG Investing

Scott MacKenzie — Wed, 10 Feb 2021 15:00:00 +0000

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Ms. Nicola Fraser with Nextkey Service talks about aligning Risk Management with Operational Goals.

Scott MacKenzie — Fri, 21 Aug 2020 15:00:00 +0000

The post Ms. Nicola Fraser with Nextkey Service talks about aligning Risk Management with Operational Goals. appeared first on Industrial Talk.

The latest Industrial News and Insights with Nancy and Scott

Scott MacKenzie — Fri, 19 Jun 2020 15:00:00 +0000

The post The latest Industrial News and Insights with Nancy and Scott appeared first on Industrial Talk.

Domenic Rinaldi with Sun Acquisitions is talking Industrial M&A Strategies for Success

Scott MacKenzie — Fri, 17 Jan 2020 15:00:00 +0000

In this week's Industrial Talk Podcast we're talking to Domenic Rinaldi, Managing Partner at Sun Acquisitions about 4-M&A Steps to Ensure Proper Preparation and Financial Success. So you're interested in expanding your Industrial “footprint”. Well, you can grow organically over time or you can entertain industrial expansion strategies that include Mergers and Acquisitions of businesses that meet your expansion objectives. In both all cases you need a skilled M&A team focused on your success. Learn more about Domenic and his wonderful team at Sun Acquisitions on how to leverage their valuable insights into creating solid solutions for your M&A strategies. Find out more by the links below:

Company Website: https://sunacquisitions.com/

Company Facebook: https://www.facebook.com/sunacquisitions/

Company LinkedIn: https://www.linkedin.com/company/sun-acquisitions-llc/

Personal LinkedIn: https://www.linkedin.com/in/domenicrinaldi/

Company Instagram: https://www.instagram.com/maunplugged/

Twitter: twitter.com/MAUnplugged

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The post Domenic Rinaldi with Sun Acquisitions is talking Industrial M&A Strategies for Success appeared first on Industrial Talk.

Secured or Asset Based Lending With Keith McAslan

Scott MacKenzie — Wed, 14 Aug 2019 13:37:00 +0000

BACKGROUND – What is Asset Based Lending or ABL?

An asset based loan (ABL) is a type of business financing that is secured by company assets. Most asset based loans are structured to work as revolving lines of credit. This structuring allows a company to borrow from assets on an ongoing basis to cover expenses or investments as needed.

Asset-based lending (ABL) is a great solution for businesses that have needs that are outside of what traditional banks can offer. Whether it’s greater leverage, softer covenants, or more flexibility, asset based structures can be customized to meet the needs of each individual company. Asset-based lending provides a line of credit based on your company’s eligible:

Accounts receivable
Inventory
Machinery and equipment

Asset-based lending offers more flexibility than other methods of financing, and is a fast and cost-effective way to obtain working capital. Unlike certain types of structured financial products, with an asset-based lending relationship, you do not have to give up equity in your company. ABL gives your company the flexibility it needs to grow, recapitalize, take advantage of supplier discounts, buyout shareholders, or even to fund payroll. It can increase or decrease based on your current business size and needs, and you’ll have daily and weekly access to your line of credit when you request it.

How Asset Based Lending Works:

Businesses need to take out loans or obtain lines of credit to meet routine cash flow demands. For example, a business might obtain a line of credit to make sure it can cover its payroll expenses even if there's a brief delay in payments it expects to receive.

If the company seeking the loan cannot show enough cash flow or cash assets to cover a loan, the lender may offer to approve the loan with its physical assets as collateral. For example, a new restaurant might be able to obtain a loan only by using its equipment as collateral.

The terms and conditions of an asset-based loan depend on the type and value of the assets offered as security. Lenders prefer highly liquid collateral such as securities that can readily be converted to cash if the borrower defaults on the payments. Loans using physical assets are considered riskier, so the maximum loan will be considerably less than the book value of the assets.

For example, if a company seeks a $200,000 loan to expand its operations. If the company pledges the highly liquid marketable securities on its balance sheet as collateral, the lender may grant a loan equaling 85% of the face value of the securities. If the firm’s securities are valued at $200,000, the lender will be willing to loan $170,000. If the company chooses to pledge less liquid assets, such as real estate or equipment, it may only be offered 50% of its required financing, or $100,000.

In both cases, the discount represents the costs of converting the collateral to cash and its potential loss in market value.

Typically, Interest rates on asset-based loans are lower than rates on unsecured loans or lines of credit since the lender can recoup most or all of its losses in the event that the borrower defaults. However, the interest rates charged depend on the applicant's credit history, cash flow, and length of time doing business.

Key Takeaways:

Asset-based lending is loaning of money using the borrower's assets as collateral.
Asset-based lenders prefer highly liquid collateral such as securities to physical assets such as equipment.
Asset-based lenders primarily serve small and mid-sized businesses that need to routinely cover short-term cash flow demands.

Business owners seeking immediate capital, leasing solutions to grow their respective businesses and either have no credit issues or have issues we have discussed today need to contact me immediately at keith@midas-financial.com or call me at 303-520-2493.

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Safeopedia: https://www.safeopedia.com/

Industrial Marketing: https://industrialtalk.com/industrial-marketing/

Industrial Academy: https://industrialtalk.com/industrial-academy/

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OTHER RELEVANT PODCASTS:

Industrial Leasing Strategies and Benefits with Keith McAslan

Industrial Sales: Looking for Something Easy.

The post Secured or Asset Based Lending With Keith McAslan appeared first on The Industrial Talk Podcast with Scott MacKenzie.

The post Secured or Asset Based Lending With Keith McAslan appeared first on Industrial Talk.

Industrial Leasing Strategies and Benefits with Keith McAslan

Scott MacKenzie — Mon, 12 Aug 2019 18:34:00 +0000

BACKGROUND:

The key with leasing is understanding if someone wants a Capital or Operating Lease. An operating lease is treated like renting — payments are considered operational expenses and the asset being leased stays off the balance sheet. In contrast, a capital lease is more like a loan; the asset is treated as being owned by the lessee so it stays on the balance sheet.

The differences are significant and as follows:

CAPITAL LEASE (also known as – FINANCE LEASE or SALES LEASE):

A capital lease is a lease in which the lessor only finances the leased asset, and all other rights of ownership transfer to the lessee. This results in the recordation of the asset as the lessee's property in its general ledger, as a fixed asset. The lessee can only record the interest portion of a capital lease payment as expense, as opposed to the amount of the entire lease payment in the case of the more common operating lease.

The criteria for a capital lease can be any one of the following four alternatives:

Ownership – The ownership of the asset is shifted from the lessor to the lessee by the end of the lease period; or
Bargain Price Option – The lessee can buy the asset from the lessor at the end of the lease term for a below-market price; or
Lease term – The period of the lease encompasses at least 75% of the useful life of the asset (and the lease is non-cancellable during that time); or
Present value – The present value of the minimum lease payments required under the lease is at least 90% of the fair value of the asset at the inception of the lease

If a lease agreement contains any one of the preceding four criteria, the lessee records it as a capital lease. Otherwise, the lease is recorded as an operating lease. The recordation of these two types of leases is as follows:

Capital lease. The present value of all lease payments is considered to be the cost of the asset, which is recorded as a fixed asset, with an offsetting credit to a capital lease liability account. As each monthly lease payment is made to the lessor, the lessee records a combined reduction in the capital lease liability account and a charge to interest expense. The lessee also records a periodic depreciation charge to gradually reduce the carrying amount of the fixed asset in its accounting records.
Operating lease. Record each lease payment as an expense and therefore reduces operating income and lessens the tax laibility. There is no other entry.

THE MIDAS ADVANTAGE:

MIDAS will work directly with your business to create a fixed rate leasing solution to acquire equipment from one or multiple manufacturers. The MIDAS team can quote competitive payments designed to fit into your budget. Simply select all of the equipment; then, we develop buyout (Fair Market Value, $1) and pricing (monthly, quarterly, annually) options for you to choose for your lease financing program.