Huntington Coast Capital To Present At Venture Capital Event At UCI

Huntington Coast Capital To Present At Venture Capital Event At UCI

Huntington Beach, CA: Huntington Coast Capital is proud to be a part of the Orange County Venture Capital Fast Pitch Conference on Thursday, November 30th at The Cove at UC Irvine Applied Innovation in Irvine, CA. Entrepreneurs from around the local and regional area will pitch their business ideas in the search of capital investment. The companies will consist of startup, pre-revenue companies to established companies looking for investment to take their business to the next level.

Huntington Coast Capital will be discussing asset based loans to the largely California-based audience. Venture capital is not necessary for every funding request and perfectly appropriate for others. In a certain circumstances, asset based financing in the form of debt is all a company needs to accelerate their growth.  For example, if your company needs capital to fund the cost of purchase orders, an asset based loan secured by the purchase order and future invoice to the customer, may be all that is required. You do not need to take on an equity partner in the this case and give a portion of your company away. Conversely, if your product or service is having a difficult time breaking in to a market segment due to lack of capital and connections, equity is entirely appropriate and maybe even necessary.

Whether your business needs venture capital or an asset based loan, largely depends on the intended use of the funds being requested. We counsel business owners on the available capital options and provide valuable insight in to the appropriate course of action.

If you would like to discuss how to navigate the capital markets and select the right funding avenue for your business goals, give us a call. My direct line is 714-719-8966 or you may reach us toll free at 844-239-2632.

To your success!

Patrick Zazueta | Founder
Huntington Coast Capital, Inc.

HCC Secures $500,000 Asset Based Loan For A Women’s Apparel Company

HCC Secures $500,000 Asset Based Loan For A Women’s Apparel Company

Huntington Beach, CA A women’s apparel company that started in 2008 was experiencing rapid growth due to increased brand awareness and marketing. The company is in a niche market within the women’s apparel industry. When the company first started in 2008, they were purely an eCommerce company. The company found that they could compete in a niche market and grow much more rapidly if they were not competing in the main stream women’s categories. Because they were largely an eCommerce, direct to consumer company, traditional asset based loans were not available to them. Traditional asset based lending companies loan against accounts receivable and inventory. These two assets on a balance sheet accompany sales to retailers, wholesalers and distributors, not sales directly to the consumer.

The company was profitable, but not to a level that banks like to see. After speaking with a number of banks with no positive results, they decided to engage Huntington Coast Capital. While asset based loans to eCommerce focused companies are not easy to come by, Huntington Coast Capital has a reliable stable of such lenders eager to be involved in the space.

The short story is, we were able to secure them an asset based loan and close in less than 3 weeks from our initial consultation. Huntington Coast Capital secured a $500,000 asset based loan against the general assets of the company. We succeeded where others failed. This asset based loan will allow the company to hit their sales numbers by giving them the capital they need to fulfill the ever-increasing orders.

Could your business use an asset based loan? Give us a call 714-719-8966.

To your success!

Patrick Zazueta | Founder
Huntington Coast Capital, Inc.

What Is An Asset Based Loan?

What Is An Asset Based Loan?

Huntington Beach, CA: The term asset based loan is widely used to describe a loan secured against an asset of value as security for the money borrowed. Huntington Coast Capital has been securing asset based loans for our clients in California and across the nation since 2010. Asset based loans consist of loans secured by commercial real estate, inventory, accounts receivable, purchase orders or equipment. Below is a brief summary on how we have assisted our clients in securing asset based loans in California and across the United States in these different categories.

  1. Commercial and investment real estate. Companies that lack sufficient business collateral are often required to pledge outside collateral as an abundance of caution in this type of asset based loan. Often referred to as bridge loans, these loans usually have terms of 6 months to 3 years and are offered through private money capital providers. These asset based loans are offered in California and throughout the country.
  2. Inventory loans. For companies in the manufacturing, distribution, wholesale and retail spaces, inventory represents cash tied up in goods for sale. Inventory can be used as security in an asset based loan. Depending on the type of inventory however, a loan may not be available. For example, if a company is selling fresh fish, meat or poultry, finding an asset based loan will likely not be possible due to the quick turn of this type of product and the potential for spoilage. Other forms of inventory such as t-shirts, tires, dried goods and other products with long shelf lives have a much better chance of being accepted as collateral for an asset based loan.
  3. Accounts receivable and purchase orders. These two assets represent an amount owed and an order for shipment. Both of these asset types qualify for an asset based loan. In fact, these two asset classes are the most popular asset based loan being requested from our clients in California. Companies in search of improved working capital utilize their accounts receivable as collateral for an asset based loan and their purchase orders as collateral when looking to obtain funding to cover their cost of goods to suppliers.
  4. Equipment loans. Asset based loans used to purchase or refinance equipment are for a specific purpose. Retail sector companies such as restaurants are big users of equipment loans as well as companies in the manufacturing sector. Often times in business acquisitions, equipment loans provide a portion of the funds required for the purchase if the equipment is currently owed free and clear and has a usable life of over 10 years.

Asset based loans are vital to the economy and provide funds to companies when more traditional finance programs can not meet the need. If you are a California company in search of an asset based loan or are located anywhere in the continental United States and looking for financing to take advantage of growth opportunities, consider an asset based loan.

Need assistance navigating the capital markets? That is our specialty and we are eager to help. For advise and counsel on asset based loans or any other form of business financing, give us a call 714-719-8966.

To your success!

Patrick Zazueta
Huntington Coast Capital, Inc.

How Will A Rise In Interest Rates Effect Business Owners?

How Will A Rise In Interest Rates Effect Business Owners?

Things That Traditionally Increase When the Fed Increases Interest Rates

 

The recent rise in the Fed funds rate will likely cause a ripple effect on the borrowing costs for consumers and businesses that want to access credit based on the U.S. dollar. That has an impact across numerous credit categories, including the following:

  • The Prime Rate: A hike in the Feds rate immediately fueled a jump in the prime rate, which represents the credit rate that banks extend to their most credit-worthy customers. This rate is the one on which other forms of consumer credit are based, as a higher prime rate means that banks will increase fixed, and variable-rate borrowing costs when assessing risk on less credit-worthy companies and consumers.
  • Credit Card Rates: Working off the prime rate, banks will determine how credit-worthy other individuals are based on their risk profile. Rates will be affected for credit cards and other loans as both require extensive risk-profiling of consumers seeking credit to make purchases. Short-term borrowing will have higher rates than those considered long-term.
  • Savings: Money market and credit-deposit (CD) rates increase due to the tick up of the prime rate. In theory, that should boost savings among consumers and businesses as they can generate a higher return on their savings. However, it is possible that anyone with a debt burden would seek to pay off their financial obligations to offset higher variable rates tied to credit cards, home loans, or other debt instruments.
  • U.S. National Debt: A hike in interest rates boosts the borrowing costs for the U.S. government and fuel an increase in the national debt. A report from 2015 by the Congressional Budget Office and Dean Baker, a director at the Center for Economic and Policy Research in Washington, estimates that the U.S. government may end up paying $2.9 trillion more over the next decade due to increases in the interest rate, than it would have if the rates had stayed near zero.

Things That Are Largely Unaffected When the Fed Increases Benchmark Interest Rates

  • Auto Loan Rates: Auto companies have benefited immensely from the Fed’s zero-interest-rate policy, but rising benchmark rates will have an incremental impact. Surprisingly, auto loans have not shifted much since the Federal Reserve’s announcement because they are long-term loans.
  • Mortgage Rates: A sign of a rate hike can send home borrowers rushing to close on a deal for a fixed loan rate on a new home. However, mortgage rates traditionally fluctuate more in tandem with the yield of domestic 10-year Treasury notes, which are largely affected by inflation rates.

Things That Traditionally Decrease When the Fed Increases Interest Rates

  • Business Profits: When interest rates rise, that’s typically good news for the profitability of the banking sector, as noted by investment giant Goldman Sachs. But for the rest of the global business sector, a rate hike carves into profitability. That’s because the cost of capital required to expand goes higher. That could be terrible news for a market that is currently in an earnings recession.
  • Home Sales: Higher interest rates and higher inflation typically cool demand in the housing sector. On a 30-year loan at 4.0%, home buyers can currently anticipate at least 60% in interest payments over the duration of their investment. Any uptick is surely a deterrent to acquiring the long-term investment former President George Bush once described as central to “The American Dream.”
  • Consumer Spending: A rise in borrowing costs traditionally weighs on consumer spending. Both higher credit card rates and higher savings rates due to better bank rates provide fuel a downturn in consumer impulse purchasing. (For more, read How Interest Rates Affect Spending.)

HCC Funds $1,300,000 In Business Loans In The Month Of December

HCC Funds $1,300,000 In Business Loans In The Month Of December

Huntington Beach, CA.  During the month of December Huntington Coast Capital secured a $650,000 equipment loan and two SBA loans for $500,000 and $150,000 for a total of $1,300,000 in business loans! The scenarios are outlined below:

  1. $650,000 equipment loan for a southern California contractor – The company was paying a high rate of interest on the equipment they used in their day to day operations – The high cost of financing was impacting their cash flow. They engaged Huntington Coast Capital for their equipment loan needs and we were able to reduce their financing costs by almost half, saving them thousands in monthly finance expense.
  2. $500,000 SBA loan for a growing company in the stencil business – The company produces custom stencils for any design and application. The company had an existing SBA loan and were looking to borrow an additional $350,000 to purchase additional equipment to meet growth demands. Huntington Coast Capital secured a $500,000 SBA loan to cover the equipment costs and refinance the existing SBA loan.
  3. $150,000 SBA Express Loan for a custom glass manufacturer – An established custom glass manufacturer was looking for additional funds for advertising and marketing to break in to new markets and broaden their customer base. They have a profitable business serving general contractors and are looking to expand in to direct commercial work.

Whether your business loan needs are for equipment purchases, inventory or general working capital demands, we can assist. We serve companies of all sizes from startup to established.

Business Loans And Knowing The Right Mechanic

Business Loans And Knowing The Right Mechanic

Huntington Beach, CA: My trip to the mechanic made me think about why it is important to have a business loan broker in your corner.

My car recently started misfiring and I took it to the local, large regional mechanic shop (name held anonymous out of professional courtesy) to have them take a look at it. This particular mechanic occupies a lot of space in a high rent district, offers coffee and cookies in the waiting area and an overall professional and sterile atmosphere. The mechanic bays where the specialists operate and solve problems for sick cars looks like it was created by Boeing itself.

After the expert diagnosis was delivered (my car needed new spark plugs and two ignition coils replaced) they provided the cost estimate. I thought to myself, “this is going to be steep” and I wasn’t disappointed. Total cost $682.17. Seeing that I need my car and can’t go more than a few hours without it, I reluctantly agreed. Their courtesy shuttle drove me home and would later pick me up.

When I returned to the shop, the mechanic came out and said, “your car is all done, but you really should replace the other ignition coils and your timing belt is showing cracks and can break at any second.” He went on to say, “the timing belt is a big expense costing roughly $1,200 and then of course the cost of the other coils would bring use to around $1,800 with labor.” I said I would bring it back as I needed to pick up my kids from school.

As I was driving to my kids’ school, my head still in a fog having gone through the surreal experience of knowing that you are not getting the whole story, but not having the knowledge to know for sure, I remembered my trusted Volvo mechanic. I went to this fancy mechanic because they can service the car the same day and I was in a urgent need to have my car back. Now that I had the time, I called my Volvo specialist and booked an appointment.

He replaced the timing belt and also took care of some other minor repairs that weren’t urgent but nice to have done (one of running lights was out, there was a slow leak in my right front tire, and an issue with the passenger side door handle). The short story was that all these repairs had a total cost of $365.00! This was the timing belt that was going to cost me $1,200 according to the fancy mechanic. By the way, the other engine coils didn’t need to be replaced and if they happen to misfire, you can take the car in at your leisure within 100-200 miles of running the car like that. Quite a different story than the high priced mechanic gave me.

Where am I going with this? I saved a few bucks and that is a great win for me personally, but what does it have to do with securing capital and business loans? A lot actually. You see, the high priced guys would never tell me about their competitor working out of a little industrial box charging 1/3 the cost. They would never tell me that replacing the other ignition coils wasn’t necessary (on the contrary, they urged me to). I saved a lot of money by remembering who else was out there, offering similar service and quality work for less.

Business owners in the market for equipment loans, purchase order financing, SBA loans or any other type of loan often enter the process blind. This exposes them to being taken advantage of and subject to convincing, yet biased, opinions of how to handle their funding needs. Direct lenders are experts at explaining the benefits of their financing, but would never tell you where to go to get a competitive quote.

As unbiased business loan consultants, we provide our clients with the confidence to explore their funding needs knowing that we, with our industry experience, knowledge and contacts, are working on their behalf. Do you know if you are about to pay three times more than you should? Is the loan structure being offered by your lender truly the best for your business?

Save yourself the time, energy and frustration of exploring your business loan options and leave it to us. We work with business owners and funding sources on a daily basis and have our fingers on the pulse of the debt markets. Give us a call and let us discuss your capital needs 714-719-8966

To your success,

Patrick Zazueta | Founder
Huntington Coast Capital, Inc.

Equipment financing, inventory financing, and working capital loans are easy to find right? Not if you’re in one of these two scenarios…

Equipment financing, inventory financing, and working capital loans are easy to find right? Not if you’re in one of these two scenarios…

Huntington Beach, CA: Business owners looking to obtain a business loan for equipment financing, inventory financing or working capital have many options to choose from. Capital is plentiful for companies on the rise and in need of financing to meet their growth potential. In fact, most of our clients come to us with equipment financing, purchase order financing, inventory financing, and working capital loan needs. Huntington Coast Capital has a extremely high success ratio in placing these loan requests.

However, there are a couple of situations where this may not be so easy. On a rare occasion we will get a funding request for a company in the medicinal marijuana industry. While the selling of marijuana is legal in some states, there is still a stigma attached to it, even if it is legitimately prescribed by a doctor. As you can imagine, obtaining funding for the growers and distributors in this industry, even if completely legitimate, is very difficult to secure. Some lenders simply do not lend in this industry and lump it together with other unsavory industries like gambling and adult content distribution. Is this fair? I have no idea. This article isn’t about providing an opinion on what the lender’s moral compass should be when analyzing loan requests in this industry. I can say, however, that finding a lender to fund your expansion in this business is very difficult. In fact, even with our extensive contacts in the industry, we only know of one. That’s right one. However, we were happy to have this contact when we received a call from a company in Colorado inquiring about an equipment loan along with funding for tenant improvements for his budding (no pun intended) business. The fact is that his cash flow and profit margins are extremely strong and his business could grow substantially with the right capital partner. Looks like we found them a solution after months of searching on their own in vain. A satisfying moment for us indeed. Now his Cannabis business is set to catapult to the next level!

The second difficult spot to be in is when you are looking for accounts receivable financing for consumer accounts receivable. The market is flooded with options for financing accounts receivable when you are selling business to business, but business to consumer is a ghost town. Most all lenders have the perspective that financing against these debt pools is risky and the credit process for business credit and personal credit is much more subjective and difficult to manage. I have to say, that I agree. To manage risk in this area requires having a specialty and sole dedication to the industry. Like other types of lending, you need to manage losses through diversifying the risk over several separate exposures and minimize credit to any one debt holder. However, this said, it is possible, just not popular among the lending community. As before, we have only one lender in this industry! We don’t come across these requests too often, but when we do, it is satisfying to say, “we may have a solution.”

Do you have a difficult loan request? Has everyone told you “no” because you fit one of the scenarios above? If so, we would like to speak with you!

Be on the lookout for our next blog article that features auto mechanics and why that experience also requires a knowledge of the options! I think we can all agree that we are paying too much for our cars to be serviced in most cases and it pays to know who else can do it for less!

Contact us 714-719-8966

Business Loans and Satisfied Clients

Business Loans and Satisfied Clients

Huntington Coast Capital has specialized in securing business loans, equipment loans, inventory loans, SBA loans and purchase order financing in California for business owners since 2011. We are good at what we do, but do not take our word for it, listen to our clients! We secured a $6,500,000 line of credit for Penguin Foods that reduced their cost of funds and allowed them to grow their business well in to the future. Click the image for the video testimonial:

HCC-client-video-image

HCC Secures $570,000 Loan For An Electronics Distributor

HCC Secures $570,000 Loan For An Electronics Distributor

In a first of two capital placements, Huntington Coast Capital secured a $570,000 SBA 7A loan for a electronics distributor in Chicago, IL.

The company was in dire need of additional capital to meet it’s growing demand. They needed capital to purchase the inventory they then sold on their online platform. Because the company sold at point of sale through the website, they were not a fit for traditional accounts receivable financing.

The company specializes in refurbished tablet computers – mainly iPad and Samsung units. In this business, it is necessary to have the inventory on hand to be able to fulfill customer orders in a timely manner. The newly acquired line of credit will allow them to do just that.

As a second step, HCC is now working with them on a supply chain funding facility for an additional $500,000 to work in conjunction with the existing financing. With a total purchasing power of $1,000,000, the company would be able to grow exponentially.

If your business could benefit from additional capital, we would like to speak with you.

To your success!

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

HCC Secures $750,000 Factoring Facility For A Coffee Importer

HCC Secures $750,000 Factoring Facility For A Coffee Importer

Huntington Coast Capital secured a $750,000 factoring facility for a coffee bean importer! The company was outgrowing its current lenders capacity quickly and needed a solution to meet the growth needs going forward.

The coffee, mainly beans imported from El Salvador, was experiencing huge demand from their existing and new customers. They needed a capital partner that could provide Letters of Credit and assist in speeding up their working capital cycle once the goods had been shipped to their customers.

Huntington Coast Capital moved quickly to find them the right solution to guarantee they had the funds they needed to take the business to the next level. We saved our client time, money and frustration during the process of finding a new lender.

Could your business benefit from additional capital? Call us! 844-239-2632. Unbiased Consultation. Proven Results.