This week I will continue (and finish) the topic of raising credit to start and/or expand a business - and in the next column I will talk a little about advertising and marketing.
In the previous column, we presented several ways to raise credit. This time we will discuss other avenues.
Funds:
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Few people know (and even fewer use it, which is a shame) but educational/provident/manager funds allow you to get a loan of up to 75% from your savings, without guarantees, without problems and on relatively good terms (not as cheap as the state-guaranteed fund, but much cheaper than an overdraft at the bank).
The loans are provided at high speed, without the need for a business plan, and can be repaid at any time, without an early repayment fee.
Also, taking a loan from a provident fund, etc., does not harm continued savings and/or future returns. It's worth checking.
Intra-bank funds:
Several years ago, Bank Poalim established the 'Poalim Growth' fund, which replicates the terms of the state's small business fund one by one.
Account holders (private and/or business) at Poalim Bank: Contact your branch and inquire about a loan from the fund. The terms there (in most cases) are better than what you are currently paying for "express" loans and/or your overdraft facilities.
Bank Leumi established the 'Leumi for Business' fund about a year ago, which offers the same conditions, but is addressed directly to all bank customers. Unlike Bank Poalim's fund, it is a bit more 'selective'. It is mandatory to go through one of the four franchisees for the preliminary review.
A well-organized business plan must be prepared.
Applications may only be submitted by businesses with a year or more of experience, and only businesses whose annual turnover exceeds 300K per year. The interest rate there is 2.75-3.51% and they undertake to transfer the money within 14 days of approval of the application.
Investor income:
Here I suggest being extra careful. An investor doesn't come in because of your beautiful eyes. An investor comes in to make money - and that's the beginning of quite a few different and strange troubles.
A rule will be in your hands: leave the option of bringing in the investor for the very end of the end of the end... unless you partner with an investor who brings added value to the industry in which you are engaged or interested in developing.
Bringing in an investor requires precise organization, detailed contracts, personalization between the owners, and full and clear coordination of expectations down to the smallest details, and even then, unfortunately, there are quite a few glitches. You have been warned!
Credit card liens:
A trick that is primarily intended to improve cash flow, rather than for investment or development. It is now possible (both within credit companies and external companies such as Y.C.I.L. and the like) to pledge future payments made by customers using credit cards, and for a small fee to receive all payments in cash.
Lien on invoices and/or work orders:
The major banks, and also a number of non-bank credit companies (not from the gray market! There is a huge difference, and we will expand on this later), have special departments designated for issuing credit to businesses that need temporary financing for importing, organizing for exporting, or organizing for the execution/production of a large order that has been finally closed with the customer.
Upon presentation of a transaction invoice/order for imported goods, they will be happy to provide you with temporary credit to finance the transaction.
The fees there are relatively high, but are relatively easy to obtain and adjusted according to the transaction, financing time, etc.
Changes:
A natural disaster. I don't have a more delicate term. There is no business (I repeat, no business) in the world that can withstand the exorbitant interest rates that the various money changers charge.
A business that reaches a point where it uses change services will make itself a board and start marking the days it has left until closing.
Am I being harsh and blunt? Maybe.
But I haven't been able to identify a single business in my years as a consultant that has been through the changes and survived. Period.
This is a sectoral disaster that I have no idea how the rabbis didn't come out against and how the public didn't wake up to change this disastrous reality.
In conclusion: Are you in a state of flux? Seek urgent business advice to save your business.
Venture Capital Funds:
There are venture capital funds (such as the Expo Fund and others), consisting of investors, that provide loans to businesses to finance expansion and/or establishment, as well as for needs such as project financing (Tama 38, etc.).
Each fund has its own specific conditions, but the common denominator is: they all have internal professional reviewers who review the applications and define the level of risk. An external guarantee is required (mainly a mortgage on assets that are not the developer's residential apartment), and the interest rates are higher than the market average.
I will write a separate column about sources of credit for very small and micro businesses later on. I hope to be in the know very soon. Details will come.
Case study: The name of the game - advertising
And in accordance with tradition (the short one, but there is already a tradition), a brief analysis of her email:
An electronics business with two branches in ultra-Orthodox neighborhoods, which opened about a year ago, is unable to reach financial balance.
After examining its history, examining its products and advertising, I can assure you that the solution is short and quick.
Its advertising is simply not true... The chain's strength is its (unimaginable, I must say) variety of accessories and peripherals. An advantage that none of its competitors have.
Unfortunately, neither the logo nor the details in all the ads and campaigns he has done to date have told us anything about what he has in store. And we will indeed expand on that next week!
For some reason, you stopped sending questions to my email.... So guys, you are welcome to send questions, requests for comments and clarifications to my email. Interesting and insightful questions will be published and answered in the next column, God willing, this coming Thursday.
• The writer is the CEO of the consulting firm M&S, which specializes in business consulting, raising business credit, building and improving sales departments, valuations, and recovery plans. He is also the founder of the 'School of Business Management - Startup'.
