Category Archives: BusinessWeek

BusinessWeek: Raising Capital With Convertible Notes

Converts look like equity, but taste like debt. To serial investors they’re brussel sprouts. But to certain entrepreneurs and angels, they’re what’s for dinner.

By Monica Mehta

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BusinessWeek: Three Alternatives to Big Bank Borrowing

Small businesses that are rejected by the banking behemoths shouldn’t overlook nonbank lenders, community and regional banks, and community development financial institutions

Bloomberg Businessweek
By Monica Mehta

If you haven’t had luck landing a business loan or credit line from the big banks you’ve approached, don’t expect your odds to improve any time soon. The Basel III guidelines, intended to prevent further financial crisis, will require lenders such as Bank of America (BAC), Citigroup (C), JPMorgan Chase (JPM), and Wells Fargo (WFC) to substantially increase the capital they hold against risk-bearing assets—up to five times what they are required to maintain today. In anticipation of the changes, which will start to go into effect in 2013, big banks are making changes to lending practices now. They’re increasingly “terming out” small business lines of credit as they reach maturity, according to several lenders and intermediaries with whom I’ve spoken recently.

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BusinessWeek: Using a Joint Venture to Expand

Bloomberg BusinessWeek
By Monica Mehta

Small businesses can benefit from formal and informal partnerships. Both sides should be clear on the terms of the deal from the start

In an environment where capital is scarce, I urge small business owners to consider collaborating with other businesses to reach new customers or broaden their offerings without the cost of developing additional expertise or hiring more employees. Unlike a merger, a joint venture lets two companies maintain separate identities. They can enter into the partnership understanding that it may be short-lived and predicate the steps to unwind it. To give you a sense of how such arrangements work, I spoke recently with two entrepreneurs who described the nuances and offered their advice.

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BusinessWeek: Five Rules for Collecting Late Payments

Bloomberg BusinessWeek

By Monica Mehta

The warning signs of a customer’s cash-flow woes are easy to detect. Reduced orders, slowing payments, a change in phone number or business name, and a reluctance to get on the phone are all signs that trouble is brewing. Requests for duplicate invoice documentation or claims that “the check is in the mail” are also obvious stalling techniques. How should you respond to delinquent customers to improve your odds of getting paid? As business bankruptcies near a 16-year high, an informed response and a thorough credit policy are fundamentally necessary.

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BusinessWeek: Alternative Exits for Business Owners

Bloomberg BusinessWeek

By Monica Mehta

You won’t soon sell your business for an ideal asking price. Here are three strategies to help you get a better offer than you might expect. If you’re looking to sell your company, it’s time to get creative. While the small business mergers and acquisitions market is finally inching forward and deals are … (Read More)

BusinessWeek: Big Changes in the Business Loan Approval Process

Bloomberg BusinessWeek

By Monica Mehta

In the not so distant past, when money was cheap and time was tight, a FICO score of 700 and a one-page application was enough to land a $150,000 business loan. (Read More)

BusinessWeek: Sellers Increasingly Play Banker

Bloomberg BusinessWeek

By Monica Mehta

Creative financing can help sellers command better prices or close deals. It can also create complications among banks, sellers, and buyers. During the recession, merger and acquisition activity in the lower-middle market (private companies with up to $100 million in annual sales) was anything but active …. Read More