Photo by Heather Middleton
By M.J. Subiria Arauz
The process of choosing a finance option for a small business can be complicated, according to business professionals.
Two speakers shared their finance experience with the local small-business community, during the Clayton County Chamber of Commerce's "Fulton & Kozak, CPA Business to Business Luncheon," on Tuesday afternoon. About 15 participants gathered inside the Community Impact Center of Higher Living Christian Church, in Jonesboro, for the luncheon.
The topic was "Alternative Finance Options for Small Businesses," said chamber officials. The speakers included Benjamin Suggs, president of Due North Business Advisors, and Scott Brown, vice president of Allegiant Business Finance.
"I thought they [speakers] were very informative and the audience seemed to be engaged," said Jessica Kinard, manager of events and programs for the Clayton County Chamber of Commerce.
Suggs showed a PowerPoint presentation to the audience about the use of unsecured loans for short term financing.
He explained that an unsecured loan is a short term loan that is not supported by any personal or business collateral. An unsecured loan typically has a high interest rate.
"The primary factor in determining an unsecured loan is your personal or business credit score," said Suggs.
He said people interested in building a credit score should read disclosures before applying for a credit card or line of credit. People should be aware of their liability options for a personal, joint or company credit card.
For a company credit card, having an expense-tracking feature allows the primary user to download charges to QuickBooks, an accounting software for businesses, he said. This feature, he said, allows one to track employee expenditures.
Other areas to be aware of include vendor discounts, benefits and rewards, said Suggs.
"A line of credit for a business is hard to get these days," said Scott Brown of Allegiant Business.
Brown said his company offers a factoring line of credit, which is able to remain untouched until the user needs it.
He said factoring is the sale of accounts receivable invoices to a factoring company, by business.
Brown said clients should not accept contracts from factoring companies.
"Ninety five percent of the industry will require a one-year contract--Don't go for it," he said.
Clients should not accept a monthly minimum fee from these companies, he said.
He said clients should also make the factoring company put their fees in writing.
"Partner with people who look out for your best interest first," he said.