Small Business Loans: Monetary Support for Your Dreams

 

Money is the power that can run a business smoothly and successfully. If you are tensed due to the limited funds you have to run your business, you can apply for a small business loan. These loans take into consideration all the big as well as small needs of your business.

 

Running a business is a venture full of uncertainties. It requires an individual to be ready with cash in hand to meet any sort of emergency or unscheduled expense at any point of time. Such a financial provision could be a small business loan. These loans are a financial assistance for a business organization to overcome its crisis situation without disturbing its financial statements.

 

Small Business Loans can be availed for any purpose without any restriction on its usage. A borrower may apply for this loan to start or expand your business, purchase or refinance equipments, cope up with certain unexpected or unscheduled expenses or restructure the balance sheet. Other than these it can also be used for paying off current debt to avoid higher interest rates or pending balloon payment. For these purposes a borrower can apply an amount ranging from £ 50,000 to £250,000 for a term of 1 to 5 years.

 

A small business loan allows a borrower to easily access funds with a reasonable monthly installment. These loans offer the flexibility to design a loan schedule so that a loan does not turns ugly for the borrowers. A loan schedule is a strategy that allows you to plan the installment plan for repaying the loan amount with convenience and protect your cash flow from getting affected.

 

Since cash flows represent the accurate picture of a company, a borrower should try to refinance most of his/her assets, real estate, commercial equipment and vehicles, to arrange for a loan. With this he can free up the cash flow for other urgent needs.

 

To conclude this, it can be said that money is the essence of a business. Thus, it becomes extremely necessary to retain funds in hand for the smooth functioning of a business.

 

How to Recruit & Build Top Managers : Top Six Things to Do for Companies Wanting to Scale-up Their Business

 

The entrepreneur faces a moment of truth when he and his partners have grown the company to a sufficient degree to take it to the next level. At that stage it becomes imperative to hire a professional as a functional head say a CFO. Obviously the top manager needs to fill in the skill set the founders may lack. It must also be recognized by founders that this skill set is absolutely vital to succeed.

The founding partners find it difficult (esp. when founders are friends and family ) to cede control to the CFO designate, since it also means giving up certain powers and also business secrets (which the entrepreneur is paranoid about) .

The Top Six Things to consider while setting up a top management team are outlined below

Try and first source from professionals in your network.

They might not be the best person suited for the job, but ‘trust’ is an important criteria at this stage, esp. for a CFO. In circumstances where you cannot find individuals who match at least 50% of skill set required, then use a professional head hunter and do an extensive reference check.

Have an extensive interview process to determine fit

For a business at an early stage, it is important that the top manager can hit the ground running fast. To do this the prospect should broadly agree with the vision of the founders, should have a first hand experience of the company culture and should be exposed to the business model. After both sides are convinced , then the prospect should be made an offer. One cannot over-emphasize the need to make the interview process extensive and lengthy.

Have a defined job role and also outline the powers that will be delegated

The entrepreneurs are very task/activity driven. So they are not great in putting down detailed job description that outlines the scope of work, key responsibilities, key success factors and powers that will be delegated to the top manager. The top manager typically will be coming from the environment where he expects the job description to be given. Entrepreneurs could take consulting help to map out the various competencies they need and how they need to develop.

Implement a performance management system like a Balanced Scorecard, and explain to the senior managers what role they play in value creation and what will the measures to track the value being created by an individual, team, function and the business.

In many businesses that are working in a fast changing environment it is important to tell the senior managers that business tactics may change on a frequent basis, which will impact the requirements of the job and also the key success factors. It is useful to define ‘flexibility’ as a key competency and sound out the senior managers at the ouset.

Work out the compensation and a credible risk-reward equation

Most firms at early stage may not be able to attract talent by paying best-in-class salary or perks. Besides they also do not offer the security of a good established brand name. So any top manager joining firms at this stage is taking some amount of risk. The compensation should have a significant upside in case the top manager is able to achieve the desired business objectives, and the business achieves a desired scale.

Although ESOPs are a good tool to tie-in the top managers with the company’s future, most entrepreneurs do not have a disciplined approach to work out the company valuation , capital structure etc. Some consulting help can be used to work this out and communicate it to the top managers. External help makes the process objective and unbiased and gets greater buy-in from the top managers.

A useful practice is to look at valuations of listed companies in the domain, and peg your company valuation accordingly. This benchmarking is also easily understood .
Typically a pool of 5-15% is necessary.

Founders need to spend a lot of time with their top & middle managers

Typically founders are fairly passionate about their products and their customers. They are not used to spend a lot of time on their managers. This can seriously affect alignment and motivation of senior managers in an growing company. The founders need to put up certain disciplines of touching base (30 minute meeting or at worst a phone call) with their top managers on a daily basis. They need to work on consciously at program , which gets the team to spend quality time together, plan together, review together and often resolve issues that are causing confusion/conflict.

Most founders will be shocked by my recommendation of at least 33% of their time committed to senior management team . But there is no point in hiring professionals if they are not aligned, motivated and guided by founders.

Consciously Work at Soft Issues of Culture, Employee Morale & Organizational Climate

While a lot of example abound about great working culture being consciously created (like the Google college culture) every organization will have its own value system , have its own cultural context determined by the vision, beliefs and the personality of the founders.

Most founders are not very aware of the culture that they have created and are not very equipped at following a strategy to develop rituals , events, activities that supports the culture of the company and boosts the employee morale. They may need to use outside help to define and manage the cultural environment and map the organizational climate.

Founders need to know that senior managers work for myriad of motivations esp. at early growth companies. One of the key motivations is to work in a vibrant, exciting and a motivating company environment. Besides, it also acts as a significant draw for a potential recruit (an oasis to a desert-starved corporate monotony) .

Simple practices such as an open-door management policy, company news board, company night outs, interesting design of work spaces, opportunities for interaction (company cafe, gym etc), flexibility ( telecommute, timings etc.) encouraging volunteerism for non-profits etc. can make a big difference to employee morale and top management motivation.

It is important to institute practices that the founders are comfortable with and define their vision of the company and its culture.

 

 

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Are There Exemptions From Registration as a Commodity Pool Operator for a Small Hedge Fund?

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Are there exemptions from registration as a commodity pool operator for a small hedge fund?

 

Section 4.7 of Commodity Future Trading Commission Rules provides for certain exemptions from certain requirements with respect to commodity pool operators making offerings to qualified eligible persons or commodity trading advisors with respect to advising qualified eligible persons. Under Section 4.7, the pool operator is exempted from certain disclosure compliance requirements. Specifically, Section 4.21 with respect to required delivery of a pool disclosure document, Section 4.24 with respect to the contents of the disclosure document in general, Section 4.25 with respect to requirements relating to the disclosure of past performance and Section 4.26 with regard to use amendment and filing of a disclosure document. The Section 4.7 exemption is not an exemption from registration as a commodity pool operator or commodity trading advisor.

 

Section 4.13 generally provides for exemption from registration as a commodity pool operator. Before its amendment in August of 2003, a person was not required to register as a commodity pool operator if the person did not receive any compensation or payment directly or indirectly; operated only one commodity pool at a time; was not otherwise required to register with the commission; and either the person or other person involved with the pools does any advertising in connection with the pool or to the total gross capital contributions for participation units in all pools that are operated, or intends to operate, do not in the aggregate exceed $400,000 and none of the pools operated have more than 15 participants. This is referred to as the “small pool exemption.”

 

Section 4.13(a)(3) generally provides for exemption from registration as a commodity pool operator where: Aggregate initial margin and premiums do not exceed 5% of the liquidation value of the portfolio and the aggregate net motional value of the positions does not exceed 100% of the liquidation value of the pool portfolio.

 

Section 4.13(a)(4) generally provides for exemption from registration as a commodity pool operator where: The person reasonably believes, at the time of investment (or, in the case of an existing pool, at the time of conversion to a pool meeting the criteria of paragraph (a)(4) of this section), that: (A) Each natural person participant (including such person’s self-directed employee benefit plan, if any), is a “qualified eligible person,” as that term is defined in section 4.7(a)(2); This exemption can not be claimed if the natural person participants only meet the 4.7(a)(3) portfolio requirement.

If I start up a Fund of Funds and allocate among equity and futures funds what  kinds of registration issues do I need to be concerned with?

As a Fund of Funds you must be aware of each particular states Investment Advisor rules. Many states have exemptions from registration. Also if you intend to invest in futures or commodity funds, you should register with the National Futures Association (NFA) and the Commodity Futures Trading Commission (CFTC) as a Commodity Pool Operator (CPO). This CPO’s associated person must successfully complete the NASD Series 3 examination.

Are there any other types of finders available to issuers in a private placement?

Yes. Rule 3a4-1 provides a non-exclusive safe harbor from the definition of a broker for persons associated with an issuer who are engaged in securities-related activities incident to their duties on behalf of the issuer. See Securities Exchange Act Rel. No. 22172 (June 27, 1985). Employees and possibly individual affiliates of an issuer who are not registered representatives of broker-dealers may be considered “associated persons” for purposes of Rule 3a4-1, in which case they may be exempt from registration and will be permitted to engage in limited sales activities pursuant to the Rule’s safe harbor.

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