Gregg Elberg asked:


Most people intuitively understand the time value of money from first time they received an allowance from their parents. All other things being equal, you would rather get your allowance today instead of having to wait for the weekend. Go to the movies today instead of waiting for the money. Instant gratification.

In business, if you have the money today you are positioned to increase the future value of your business by increasing sales of services or products over a period of time. There are several mathematical concepts to compute the time value of money such as present value, future value, present value of an annuity, and future value of an annuity. These computations are beyond the scope of this article.

Uneven cash flow is a challenge to B2B businesses that have to meet regular obligations such as payroll, rent and supplies. One solution to this problem is accounts receivable financing which is also known as factoring, factoring receivables and asset based lending. With accounts receivable financing you can get cash for your invoices immediately and give terms to your customers to pay you in thirty, sixty or ninety days.

The financial markets today are exceptionally volatile. There are grave concerns regarding a meltdown in the mortgage finance market and several major providers of home mortgages than have declared bankruptcy or exited this market. The secondary market for certain types of mortgage securities has virtually closed the door on securities known as subprime home loan securitizations which makes these types of bonds, not having any liquidity, virtually worthless. Why is this relevant to accounts receivable financing?

A little known fact is that many commercial finance firms that provide accounts receivable financing are not using their own money to fund their transactions. This is sometimes called “refactoring”. Their funds may be available from three sources: bank lines of credit, investor participations and the equity of the firm. Bank lines of credit, or asset based credit lines from major non-bank commercial finance firms are by far the largest source of funds for most firms that offer “refactoring” accounts receivable financing.

These firms are under more pressure from their lenders to make safe and sound loans. The pressure comes from Banks, Federal regulators such as the Federal Deposit Insurance Corporation and the Federal Reserve Banks. This may affect how long it takes to get financing.

There is a process called due diligence which is a pre-requisite to accounts receivable financing. Several components are: analyzing the credit of the borrower; analyzing the credit of their customers, and running a UCC-1 search in each state where the company operates. The UCC-1 search and filing is required to give the lenders the legal right to collect the accounts receivable that are being sold or pledged for the financing. This can take 5 to 10 days depending on the state bureaucracy and how busy they are with such requests. If the UCC-1 report is not “clean” meaning first lien status is not available to the lender, there will be no financing. Tax liens, legal judgment liens, and earlier financing liens can delay financing until they either are paid or subordinated.

When a B2B business is growing rapidly and needs more cash flow for operations the time value of money becomes critical. There is a common answer the question: “When do you need the money?” Answer: “Yesterday”.

John Lennon and Paul McCartney understood the time value of money and more importantly for them, the money value of time. They were the primary songwriters for the group, The Beatles, from 1960 to 1970. The group experienced major cash flow difficulties because of poor financial management of recording contracts, out of control costs of running their record business, Apple, and the pressures that caused them to renounce public performances (which was a major source of income). Some of their greatest songs (and a source of substantial future income) were created while they were on a hiatus to meditate with the Maharishi Mahesh Yogi in India in 1965. In 1970 The Beatles disbanded because of personality differences, the stresses of mass popularity and financial problems. Paul McCartney’s song, Yesterday, is considered to be the most recorded song in the history of popular music, if not the most popular song of all time. Here are the lyrics to Yesterday:

Yesterday,

All my troubles seemed so far away,

Now it looks as though they’re here to stay,

Oh, I believe in yesterday.

Suddenly,

I’m not half the man I used to be,

There’s a shadow hanging over me,

Oh, yesterday came suddenly.

Why she

Had to go I don’t know, she wouldn’t say.

I said,

Something wrong, now I long for yesterday.

Yesterday,

Love was such an easy game to play,

Now I need a place to hide away,

Oh, I believe in yesterday.

Why she

Had to go I don’t know, she wouldn’t say.

I said,

Something wrong, now I long for yesterday.

Yesterday,

Love was such an easy game to play,

Now I need a place to hide away,

Oh, I believe in yesterday.

Mm-mm-mm-mm-mm-mm-mm.

The bottom line: If your B2B business needs money yesterday accounts receivable financing may be the answer to your cash flow challenges.

Copyright 2007 © Gregg Financial Services

www.greggfinancialservices.com



Brandon

Gregg Elberg asked:


Success is not an overnight occurrence for most businesses. Years of hard work and struggle are a common denominator for most enterprises. Success as a concept can be complicated because it may involve more than profits on a balance sheet. The MSN Encarta dictionary defines success as:

1. Achievement of intention: the achievement of something planned or attempted;

2. Attainment of fame, wealth, or power: impressive achievement, especially the attainment of fame, wealth, or power;

3. Something that turns out well: something that turns out as planned or intended;

4. Somebody successful: somebody who is wealthy.

What is business failure? It may be that most businesses don’t die or fail; the owners close them for reasons unrelated to whether the business is making money. According to David Birch, former head of a research firm specializing in studying small business data, would-be entrepreneurs don’t realize what’s truly involved with running a business. He estimated survival rates:

• First year: 85%

• Second: 70%

• Third: 62%

• Fourth: 55%

• Fifth: 50%

• Sixth: 47%

• Seventh: 44%

• Eighth: 41%

• Ninth: 38%

• Tenth: 35%

“Once you’ve hit five years, your odds of survival go way up,” Birch said. “Only two to three percent of businesses older than five shut down each year.” Hard statistics on business success vs. failure rates are hard to establish. Mark Twain once said, “The news of my death has been greatly exaggerated.” The same may be true for many businesses.

Accounts receivable financing can help to make the difference between success and failure for many B2B businesses that need capital to grow. The terminology: invoice financing, invoice funding, factoring, factoring receivables and accounts receivable financing are all terms that mean essentially the same thing: the process of selling your invoices, your accounts receivable, to a commercial finance company to accelerate cash flow. You sell the account receivable. The commercial finance company advances you 70% to 90% of face value. Your customer pays the invoice to the commercial finance company. They rebate to you the difference between their fees and the remaining cash. If your business sells products or services to other businesses or to the government, with a gross margin of 25% or more you can grow profitably with accounts receivable financing; and you can give terms to your customers.

Asset based financing is a form of accounts receivable financing for larger transactions. The main difference between asset based financing and accounts receivable financing is price: larger transactions may be priced with a spread of 2% to 4% over the prime rate plus an administrative fee compared to factoring fees of 1.5% to 4% per month. The actual amount of charges depends on the contract terms which vary widely. In this author’s article, Financial Myths vs. Financial Facts there is an extensive discussion regarding various pricing methods and outcomes.

Imagine if your business were like a flower with the chance to bloom the first time in years. There is a plant known as Agave parryi, also known as the Century Plant. They often take forty to sixty years to flower. Then they die. Few businesses can wait that long to flower.

The asset based lending industry is a multi-billion dollar business. Companies large, small, and startups participate in accounts receivable financing and asset based lending. Purchase order financing is available to pay for the cost of goods when purchase orders are too large for the business to self-fund the product. If you need help with capital to grow, these are important financing techniques to consider for your business’ success.

In August 1965 The Beatles released a Studio Album called: Help! The song was a number one hit single. The song was written by John Lennon and Paul McCartney. At this point in the career of the Beatles, they had not personally made much money and they may have been on the brink of failure because of artistic differences and financial naivety. John Lennon said that the lyrics to Help! were a cry for help and a clue to the confusion and despondency he felt. He also regretted the commercial pressures to make a successful upbeat record that compromised his artistic sensibilities. The Beatles succeeded in writing many of the most popular songs in music history; they were one of the most successful recording artists of all time. Nevertheless, the Beatles failed to stay together as a live performing group after 1970. There were only ten years of live performances. Decades of royalties and riches followed.

Here are the lyrics to The Beatles - Help! by John Lennon and Paul McCartney:

Help, I need somebody,

Help, not just anybody,

Help, you know I need someone, help.

When I was younger, so much younger than today,

I never needed anybody’s help in any way.

But now these days are gone, I’m not so self assured,

Now I find I’ve changed my mind and opened up the doors.

Help me if you can, I’m feeling down

And I do appreciate you being round.

Help me, get my feet back on the ground,

Won’t you please, please help me?

And now my life has changed in oh so many ways,

My independence seems to vanish in the haze.

But every now and then I feel so insecure,

I know that I just need you like I’ve never done before.

Help me if you can, I’m feeling down

And I do appreciate you being round.

Help me, get my feet back on the ground,

Won’t you please, please help me.

When I was younger, so much younger than today,

I never needed anybody’s help in any way.

But now these days are gone, I’m not so self assured,

Now I find I’ve changed my mind and opened up the doors.

Help me if you can, I’m feeling down

And I do appreciate you being round.

Help me, get my feet back on the ground,

Won’t you please, please help me, help me, help me, oh.

The bottom line: if you need help with your cash flow for your B2B business, accounts receivable financing may be the answer for your success.

Copyright © 2007 Gregg Financial Services

www.greggfinancialservices.com



Tonya

Ricky Sharples asked:


Left handed people can become guitar players but there are some adjustments you need to make to your guitar and your outlook. First if you think that you “should” be right handed because that is how guitars are designed, think again. If the hand that keeps telling you it wants to perform actions is your left hand, you are better off listening to it. This is your active hand, which makes your right hand passive. So in a way, your left hand tells your right hand what to do. Paul McCartney is one guitar player who tried to make his right hand do the picking and it did not work. He only started to get anywhere with playing the guitar after he changed the strings around and started picking with his left hand. There are lots of left handed guitar players who have mastered their instrument and gained fame and fortune. I have already mentioned Paul McCartney, and there are many others like Curt Cobain, Tony Iommi, Jimi Hendrix and Slim Whitman.

Dick Dale, “King Of The Surf Guitar” is one notable exception to this rule. The first guitar he learnt to play on was a normal right handed guitar. So he forced his hands to learn to play without changing the order of the strings on the guitar. Even after he was able to buy custom made left handed guitars, he still played with the strings in the right hand positions because that is what he was used to. Bobby Womack and Albert King also play like this.

So what changes need to be made to a guitar to make it suitable for playing left handed? Well, when you hold a guitar in playing position the sixth string - the E string which is the thickest guitar string needs to be on top of the guitar, that is closest to your shoulder. To achieve this the order of the strings needs to be reversed. If you hold a right handed guitar in front of you and look straight at it, the sixth string is on your right hand side. To string the guitar for left handed playing, the first string should be on the right hand side.

Also, the two parts of the guitar that actually hold the strings on - the bridge and the nut need to be changed around. If you look closely at these parts you will see that they have slots cut in them to hold the strings. Naturally the nut and bridge will need to be turned upside down to fit the strings in the reverse order.

Now for the question of buying left handed guitars. Many guitarists complain that left handed guitars cost around double the price of right handed guitars, so you will need to do some serious shopping. Tokai and Vintage make serviceable mid-range left handed guitars for a reasonable price,. Fender make all the ‘basic’ model Telecasters and Stratocasters for leftys, and Gibson make left handed versions of all their flagship guitars.

Now let us look at another challenge for left handed guitarists - chord charts. If you do a search on the web you will find a range of printed left handed chord charts and chord generators. A good on to start with is “Left Handed Guitar Chord Chart”, by Robert Tarchara. There are also books that are written especially for left handed guitar players:

Mel Bay Left-Handed Guitar Chords, by William Bay, 2005

Guitar Case Guide to Left-Handed Chords, by Rikky Rooksby, 2001

Guitar Case Guide to Left-handed Scales, by Rikky Rooksby, 2006

Fortunately there are many left handed guitar players who have been willing to share the knowledge and experience on line. Some can be found on forums, others have set up their own websites. Among other tips they can help with where and how to buy left handed guitars.



Cody

Scott Michaels asked:


John Winston Ono Lennon, MBE (9 October 1940 - 8 December 1980) was an iconic 20th century composer and singer of popular music with Paul McCartney as Lennon McCartney throughout the 1960s, and was the founding member of The Beatles.

Lennon’s songwriting was an integral part of The Beatles’ profound commercial and critical impact. His melodies, written during the Lennon-McCartney era, and later, in his solo career, are distinctive and unashamedly romantic.

Lennon’s lyrics reflected his personal and career demands, philosophical outlook, his unease with his fame and current events. He and McCartney popularized the use of electronic effects in rock music.

Lennon, on television and in films such as A Hard Day’s Night (1964), and by press conferences and interviews, revealed his rebellious, iconoclastic nature and quick, irreverent wit. Lennon channeled his fame and penchant for controversy into his work as a peace activist, artist and author. He was murdered in New York City in December 1980.

In 2002, the BBC polled the British public about the 100 Greatest Britons of all time. Respondents voted Lennon into eighth place.

Lennon had a profound influence on rock ‘n’ roll and in expanding the genre’s boundaries during the 1960s. He is widely considered, along with McCartney, to be one of the most influential singer-songwriter-musicians of the 20th century.

Many of the songs written exclusively or primarily by Lennon, however, are more introspective — often in the first person — and more personal than McCartney’s.

His most surreal pieces of songwriting, “Strawberry Fields Forever” and “I Am the Walrus”, are examples of his unique style. Lennon’s partnership in songwriting with McCartney involved him - many times - in complementing and counterbalancing McCartney’s upbeat positive outlook with the other side of the coin, as one of their songs, “Getting Better” demonstrates.

Lennon had a profound influence on rock ‘n’ roll and in expanding the genre’s boundaries during the 1960s. He is widely considered, along with McCartney, to be one of the most influential singer-songwriter-musicians of the 20th century. Many of the songs written exclusively or primarily by Lennon, however, are more introspective — often in the first person — and more personal than McCartney’s. His most surreal pieces of songwriting.



Teresa

Andri Irawan asked:


 

When you talk about classic rock, surely you will be associated with the Beatles. The Beatles is one of the best and biggest pop rock bands that the world produced. John Lennon, James Paul McCartney, George Harrison and Richard Starkey (also known as Ringo Starr) were born during the 1940s in Liverpool, England. During the post war period, Liverpool was a dirty depressed town and money was rarely to meet. Two decades later, these four men would shock the world with their musical breakthrough. Their music contribution is beyond question. Beatlemania, the fanatic fan of beatles, are spread in entire world, even until today.

One their best masterpieces, yesterday, is considered as one of the best classic rock song ever produced. It was McCartney’s masterpiece that he recorded on June 14, 1965.

This is probably Paul’s most successful song, as Yesterday has been recorded more than 2500 times by other artists over the years, being the most recorded song in music history! The tune for Yesterday came to him during the night. As he awoke, he went straight to the piano and played the complete tune. So easy this was, Paul feared that the tune must be from another song or belonged to another. No one had heard it before and consequently, yesterday was born.

When Yesterday was initially released, it received some critics and controversies from the press, when they learned that it was a purely McCartney recording, without the other three Beatles’, yet released under the name of The Beatles. People feared at the time that this was McCartney’s break into a solo career, but this was not true, not at least for another five years. Yesterday was still be part of the Beatles’s history instead of merely McCartney’s masterpiece.

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Paula