Dennis F. Palumbo, CPA, PA

Dennis F. Palumbo, CPA, PA

Our business was growing fast and we needed a funding solution that could grow with it. As a service company working directly with consumers, we did not fit the mold of most working capital financing solutions offered by the masses. We needed something flexible, low in cost and hassle free. Huntington Coast Capital was able to secure our $150,000 loan with less energy and time spent, which allowed us to focus on our day to day operations. If your company needs additional capital for expansion, talk to Huntington Coast Capital.

“I Wish I Knew Then What I Know Now!”

“I Wish I Knew Then What I Know Now!”

Blog articles discussing factoring companies, factoring loans, invoice factoring,small business finance and all things related.

As we get older and reflect on our past experiences the old saying, “I wish I knew then what I know now” has more and more relevance. We have all had those times when we wished we hadn’t said something moments after we said it, or emailed something that should have never been in writing, or maybe it was something we didn’t do that we wished we had. These experiences happen for all of us in our personal and professional lives over time. Like aging itself, these moments are impossible to avoid.

As we go through our professional career we learn certain things though trial and error. We have all worked with managers we loved and those we didn’t. Through our experiences we learned in which environments we thrived and in which we didn’t. Some of us were managers who learned how to work with others over time. In the beginning, we made a lot of mistakes and made adjustments to our approach in order to become better at our managerial responsibilities. We studied and learned from the great managers in business and we listened to our employees and used their constructive feedback to become a better motivator, teacher, team player or whatever it was we needed improvement on. It’s an on going work in progress that is really more of a journey than a destination.

Mentorship programs are popular in graduate school. Having a mentor cuts through a lot of the self exploration and provides some solid advice on how to succeed as a leader. If it’s been done before, we can study and learn from it. This saves a lot of time when aspiring to learn something new. We all have our own point of view, our own style, but we pull from others what we like and see relevant to our situation. Learning from others that have been where you are and have succeeded at it, is a powerful source of knowledge and gives us a huge advantage when taking on a new task.

However, before mentorship programs we had the guidance of our parents. Our parents gave us advice on how to handle situations that came up in school or on the playground. We learned how to deal with others and “share” even when it was not something we necessarily wanted to do. As we know, our parents were once young and they experienced the things we were experiencing for the first time. They provided guidance on life matters from their experience. They were our first teachers when it came to everything from potty training to relationship advice (when we became old enough to be interested in such things). Without the guidance of our parents, learning would have taken a lot longer, and some things we simply wouldn’t even try without them there to help us (i.e. swimming or riding a bike).

So what does this have to do with being a business owner? Well, as entrepreneurs we start a business typically because we have the connections and experience in a certain area. We rationalize that we have enough raw talent and drive to be successful. We say to ourselves that “I know enough to run my business and that which I don’t know, I can learn.” With enthusiasm and passion we start our business with big aspirations and goals.

Not to be negative, but as we know, most small businesses fail. For example, just because you’re a great cook, doesn’t mean you can manage people and run a successful restaurant. There are many things we learn when we voyage out on our own, some of which we hadn’t thought about when we first started out. Business owners soon realize that in order to sell their product, they must also have knowledge in accounting, human relations and banking to name a few. These are areas that are necessary, but not necessarily areas we have experience in when first starting our own business.

So what inspired this blog post? Again, our clients. A growing number of our clients are coming to us because the bank is kicking them out. They say, “I wish I knew then what I know now!” referring to some bank covenant that they triggered that resulted in the bank freezing their credit line. They are being asked out of the bank and pressured to find a “more suitable” lender.

Huntington Coast Capital has received the compliment of being told that we are “invisible, but invaluable.” You won’t see our name in any annual reports, or mentioned in any trade publications highlighting super fast growth companies. However, our services are a catalyst in getting your business to it’s true potential. Securing a flexible lender that understands your business and has the entrepreneurial mindset required to understand your vision is invaluable.

Do you want to save time and frustration in finding the right lender for your business? Would it be worth something if you knew where the flexible funding partners were that could bring real value to your business? We want to help.

Huntington Coast Capital bridges the gap and guides you into the lap of entrepreneurial lenders that are looking to fund your business without the limiting covenants and regulations of traditional lenders. Call us to discuss your funding needs. Don’t be one of those failed business owners that tell themselves, “I wish I knew then what I know now.”

To your success!

Patrick Zazueta | Founder
Huntington Coast Capital, Inc.
714-719-8966

Recent Example Of An Approval On A Tough Funding Request

Recent Example Of An Approval On A Tough Funding Request

Blog articles discussing factoring companies, factoring loans, invoice factoring and all things related.

Many companies out there provide purchase order financing and each have their desired “sweet spot” when considering funding requests. While most companies will entertain your purchase order if you are receiving traditional order requests from tradition customers, few will grant credit on anything deviating front the norm. When I say traditional orders I mean orders taken from retail or wholesale customers. Traditional customers meaning customers with credit that is easily verifiable with a strong payment and financial history.

So what if your request isn’t “the norm?” We recently had such a request and found them the funding they needed.

Here’s the scenario: our client operated as a sandwich distributor supplying customers with home style sandwiches for schools and other municipalities. His business was growing and he needed purchase order financing to fill the orders. Easy enough right? Wrong. Because his products are perishable items, only one purchase order finance company would consider the request. You see, our client personally would go out, take an inventory of the sandwich supply and write down how much inventory had to be replaced. He would then take that purchase order that he created and submit it to his supplier to fulfill.

There are two issues for most lenders here: 1) perishable items, 2) the client creates his own purchase orders. Why are these an issue? Well, for a couple reasons. Firstly, most lenders are wary of lending to companies dealing with fresh perishable items largely due to spoilage. The spoilage risk could reduce the amount owed and thus create a risk to the lender’s exposure. Secondly, the client is creating his own purchase orders and receiving financing based on those orders. The lender is exposed here as the client could theoretically fabricate the amount of the purchase orders upward to assist the company’s cash flow. The lender would then advance on the amount of the purchase order and unbeknownst to them, be in an involuntary over advance.

So needless to say, most purchase order funding companies we deal with were not open to working with our client. Except one. You see, with a few more questions asked, we were able to get one of our lender’s comfortable. Regarding the sandwich spoilage, this is running at about 3% which is a nominal amount and well below the standard reserve taken in the formula advance. On the purchase order issue, our client receives a verification from the supplier on each purchase order and the sandwiches are closely monitored in a tracking system. Any excess sandwiches would not fit the amount being shown as used in the customer’s coolers. Additionally, our client’s warehouse is continually monitored by the USDA for quality and cleanliness reviews.

All this considered, the purchase order financing company was comfortable and granted the funding needed. Above and beyond the sandwiches, our client also distributes supplement drinks. This product line is a larger percent of the business and will be included in the collateral pool for the line of credit. All in the client needed $250,000 in immediate purchase order financing and has a backlog which should increase this substantially starting next month.

If your business could benefit from a lender that listens, we would like to speak to you.

To your success!

Patrick Zazueta | Founder
Huntington Coast Capital, Inc.
714-719-8966

Fueling The Economy, One Small Business At A Time!

Fueling The Economy, One Small Business At A Time!

Blog articles discussing factoring companies, factoring loans, invoice factoring and all things related.

2015 has started out with strong momentum. We are seeing more funding requests than ever before. The small business pulse is alive and well and these entrepreneurs need capital to hit their business goals. Below are some recent examples of how our purchase order financing and factoring company lending affiliates made some goals attainable:

$500,000 Purchase Order Financing and Factoring Facility
A young company in the apparel industry is experiencing some explosive growth. Their sales to date have largely been online and on credit card terms with their customers. However, when a large national retailer came knocking, both the size of the orders and payment terms changed.

The company was excited to earn some shelf space with the powerful retailer, but how would they fill the orders, deliver on time and meet the retailers expectations? The company is new and growing and doesn’t yet have the capital reserves to meet the cost of the purchase orders (in this case $500,000 over the next 12 months).

Huntington Coast Capital found them the answer with one of our purchase order financing and factoring companies. As a new company, they didn’t have the time in business or financial strength for bank financing. They needed someone that could act quickly and fund 100% of the cost to the supplier. We procured the right funding and delivered in the time they needed us to. Result – they were able to fulfill the order and have others waiting behind it.

$150,000 Government Loan for a Retail Ice Cream Shop
A retail ice cream shop came to us looking for capital to expand their operations. They used their own funds for tenant improvements to their location, but were looking for additional capital to hire more staff and advertise in local media outlets.

A retail ice cream store naturally would not be a target for factoring companies. We were able to get them qualified under the low cost SBA Express Program. This program is currently at 6% and tied to the Prime rate. The short story is that the company will be able to expand operations to meet demand and take their business to the next level.

$5,000,000 Purchase Order and Factoring Facility
A contractor with an existing business came across an opportunity to fulfill a large order for a government entity. The work order entailed the need for salt to be used in the removal of snow on the road ways. The good news was that they would be selected if they could come up with the wherewithal to deliver the goods. The bad news was that they had two to a max of three weeks to show that they had the funding to deliver or another vendor would be selected.

The company first went to their bank to ask for a line of credit to fulfill the order. The bank, based on the relationship they had for years with the client, was able to provide a $1,500,000 line to assist in fulfilling the order. The problem was they needed around $4,100,000 for the initial round and the bank’s offer was substantially inadequate for their needs.

They called Huntington Coast Capital. We quickly knew who the select lenders were for this request. After interviewing three potential funding partners, the company selected one and were able to meet the order. The goods will be fully delivered by the end of this month.

Could your business use some flexible funding to boost your production? Are you frustrated with the underwriting guidelines of traditional lenders? If so, we would like to assist! Please contact us to discuss the details of your request.

To Your Success!

Patrick Zazueta | Founder
Huntington Coast Capital, Inc.
714-719-8966

The Difference Between A Commodity Lender And A Value Add Lender

Blog articles discussing factoring companies, factoring loans, invoice factoring and all things related.

There was a time when our clients viewed factoring companies and purchase order finance companies as “too expensive.” In recent times, we are noticing the value of these lenders’ services finally being recognized and the old stigmas of the past slowly fading. Our clients are viewing their factoring company partner as just that, a partner, that is facilitating their business growth without requiring equity in their company.

When you are in search of a mortgage to refinance or purchase a home, you are looking for the lowest rate. This is because the mortgage business is a commodity business and the large players in this space are competing primarily on rate. Note: I am referring here to the traditional, straight forward refinance or purchase for a buyer with good credit searching the market. I realize there are specialty lenders out there that structure bridge loans and provide funding for difficult property types and credit stories – they are a different story and bring value similar to factoring and purchase order companies.

Conversely, when it comes to business funding requests that fall outside of the traditional lender’s strike zone (i.e. funding progress payments, healthcare accounts receivable financing, inventory financing, companies experiencing losses, etc) the market is more aligned with the entrepreneurial lenders out there that will take a bigger risk in return for a higher return.

In a recent example, we assisted a client of ours in a turn around mode. The company was struggling with which direction to take the company. Instead of working together on a solution to take the business forward, each side dug in and refused to alter their plan for what they thought was right. Each side had strong wills and big egos which eventually led to the failure of the business.

Seeing that the company had a strong following and brand recognition, an investment firm came in and provided the capital to get the business back on track. Once all the piling financial obligations had been settled, the company needed a working capital line of credit to grow the business effectively. Because the company was owned over 90% by an investment group, a personal guarantee was not available. This ruled out the traditional funding sources which require a guaranty from the owners in the business.

Here is where Huntington Coast Capital was able to bring value. Our affiliate lenders do not focus on the current financial condition of the business, but rather the potential the company has. If there is market demand, purchase orders and existing sales, you have enough to qualify. We were able to connect them with the right purchase order financing company and factoring company to help them realize their potential. They are now able to put the past behind them and focus on the company’s growth without worrying about the restrictive requirements that would be placed on them with traditional lenders.

If your business could benefit from partnering with an entrepreneurial lender, we would like to speak with you.

To your success!

Patrick Zazueta | Founder
Huntington Coast Capital, Inc.
714-719-8966

You Don’t Have to Give Up Equity in Your Business!

Blog articles discussing factoring companies, factoring loans, invoice factoring and all things related.

I wanted to talk today about an interesting observation we have seen over and over again with our clients. Most view an equity investor as a sexy option to their funding needs. As a validation of sorts that their business has been verified and good enough for a private investment.

However, the truth is that equity funding is only needed if you are looking for a source that has crucial industry contacts and/or need money for fixed expenses.

We often hear that “I can’t get bank financing, but the alternative lenders out there are too expensive.” Equity investors are the most expensive option in the pool of available funding options.

Factoring and asset based lending companies offer the best of both worlds – a flexible and reliable source of capital and lower in cost than equity investors.

Further, the main benefit of debt over equity is the fact that when you don’t need to borrow anymore you simply opt out of the renewal of your contract. With equity investors, you are committed to the long haul and in some cases up to and including the sale of the company!

A factoring company, some of which also offer lines of credit, will lend against the face amount of your invoices and your credit line is only limited by the sales you generate. If your invoices are to credit worthy debtors, you can obtain the financing you need with a factoring company.

Many factoring companies offer purchase order financing in conjunction with their factoring facility. In a recent example, Huntington Coast Capital obtained a $5,800,000 purchase order and factoring facility for a company that the bank was only willing to give $1,500,000 to. The difference was that the bank was looking at the financial strength of the borrower and the factoring company was looking at the credit strength of the borrower’s customer.

The money was freed up on a collateral basis and facilitated the order being delivered. Was it more expensive than bank financing? Sure. However, it was available and made the borrower a lot of profit as a result.

If your business could use a flexible funding source to assist your business growth, we would like to speak to you!

To your success!

 Patrick Zazueta | Founder
Huntington Coast Capital, Inc.
714-719-8966

Huntington Coast Capital wraps up the 4th QTR with 5.7MM in new business loans!

Blog articles discussing factoring companies, factoring loans, invoice factoring and all things related.

As 2014 comes to a close and people start to prepare for the holidays, we at Huntington Coast Capital are feeling especially grateful. When I started this business 5 years ago I wanted to assist small business owners with primarily purchase order financing and invoice factoring needs. Since our inception, our services have developed in to a broad array of financing delivered by both private equity and institutional debt sources.

We are constantly motivated by the entrepreneurs we are in contact with everyday. I have had the privilege of speaking to big thinkers in small and established companies across the country. In just this past year, we have been exposed to great ideas in everything from the technology industry, oil and gas industry, apparel trade to bamboo toothbrush inventors! As the saying goes, “you are the company you keep” and we have the rare opportunity to speak everyday to those with huge ambition and drive. This constant reminder helps us to stay focused on the small business dreams so many have in this great country!

Banks continue to be stringent and tight on credit. However, the entrepreneurial spirit and forward thinking remains strong with the factoring companies and private sources we are affiliated with. It is rewarding to play a small part in the fulfillment of our client’s dreams. We look forward to carrying this momentum through 2015 and beyond as we help fuel the economy, one small business at a time!

To your success!

Patrick Zazueta | Founder
Huntington Coast Capital, Inc.
714-719-8966
Patrick@huntingtoncoastcapital.com

As a Broker in the Factoring Industry, What are the Most Important Things You Want to See in a Lender?

Blog articles discussing factoring companies, factoring loans, invoice factoring and all things related.

I pondered this question last night and came up with a few things and a few realizations. When we are referring our clients to a factoring company both our client and I have the same expectations. We expect the factor to be responsive, flexible, solutions focused, easy to work with and efficient.

Our clients come to us in search of financing and sometimes those needs can be met with factoring. Having been in the factoring industry since the early 90’s (taking a 7-year hiatus to be involved in commercial real estate finance) we have many factoring companies and contacts we trust in the industry. They all met the criteria and we feel comfortable placing our endorsement on them when referring our clients.

However, when a factoring company approaches us that we haven’t worked with before, we need to be discerning. Are they responsive to us as brokers in the industry? Are their underwriting guidelines similar to a bank while charging factor rates? Are they pleasant to deal with? What kind of capital backing do they have? Will they support our client with the flexible lending they are looking for and great customer service?

These questions are the same questions our clients have. As brokers, our strength and value is saving the client’s valuable time. Not all factoring companies are created the same and we need to show the client that we are saving them time and hassle by going to the best option for their business.

For example, there is a factor we used in the past (to remain nameless) that we no longer use for what some may consider to be a minor detail. The minor annoyance we have – they cut checks instead of wiring the monthly commissions. A nit-picky thing to be concerned with some may say. However, isn’t this a minor change they could make to ensure that their client is happy? Are they showing the broker community that they are flexible when they don’t want to make this change for their client’s convenience? It raises the question, “how flexible will they be with the clients we refer them?”

We have spoken numerous times to the sales person that calls on us about this and he says that, “credit doesn’t want to do that.” It’s their call, but not the kind of flexibility we are looking to introduce our clients to. From our perspective, this is a minor change that could be made and they would be on a par with what the other factors are doing in the industry. We don’t feel we should be dealing with checks anymore than pagers in the present day.

So how flexible are your group of factoring partners? From our perspective, we can’t refer clients to a factor that is inflexible with us.

What is the group’s experience? We would like to hear from you.

To your success!

Patrick Zazueta | Founder
Huntington Coast Capital, Inc.
714-719-8966

Can Your Business Use Some Growth Capital?

Blog articles discussing factoring companies, factoring loans, invoice factoring and all things related.

There are a lot of terms used in financing. Growth capital is one of my favorites. What is Growth Capital? My definition is – money that is needed to expand the business and take advantage of growth opportunities.

As business owners, sometimes there are circumstances that arise that require funds above and beyond the cash flow of the business. Factoring companies can accelerate your cash flow by advancing cash against your account receivable, but what if you need more than that or your cash needs are to fund fixed expenses?

We have been seeing a lot of demand for a government loan program that was created to fulfill working capital and equipment needs. A small and select group of banks are offering this program. If you are a small business owner looking for a business loan up $150,000, inquire here.

Some of the details of the program are:

– 6% interest tied to the Prime lending rate
– 10-year amortization
– no prepayment penalty
– business owner can not have any liens, suits or judgments against the company
– no personal bankruptcy over the past 36 months
– personal credit score above 670

Our clients are using this loan to cover the costs of purchase orders, to market their business, to refinance debt, and to build inventory to name a few. The term “working capital” is a loose term meaning anything that is going to benefit the business. While using the loan for equipment is fairly specific, using it for working capital covers a broad base of uses.

If you would like to know more about this product, please inquire with us and learn more.

To you success!

Patrick Zazueta |Founder
Huntington Coast Capital, Inc.
714-719-8966

Need Capital to Expand Your Restaurant? Inquire here!

My company, Huntington Coast Capital, is a capital markets advisory firm established in 2010. While our focus has traditionally been trade finance for manufacturers, wholesalers and service companies, we have experienced an inflow of restaurant and bar owners looking to expand their operations.

In brief, there is a government sponsored loan program being offered currently at 6% APR (tied to Prime) that can be used for working capital and/or equipment purchases. It has been designed to stimulate the economy and get capital in the hands of business owners looking for funds up to $150,000.

General program details include: 10-year amortization on the loan, no prepayment penalty, business can’t have any liens, suits or judgments against it, no bankruptcy in the past three years, must be in business for over two years, and the owner(s) must have decent personal credit (above 670 FICO).

If you are approved for the full $150,000, your monthly payment is around $1,600 including principle and interest. This is by far the most cost effect product on the market at this loan size.

Think this product could bring value to your business? Inquire here and let’s discuss further.

To you success!

Patrick Zazueta | Founder
Huntington Coast Capital, Inc.
714-719-8966