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February 24, 2011
The Patient Protection and Affordable Care Act represents the most significant transformation of the American health care system since Medicare and Medicaid. It will fundamentally change nearly every aspect of health care, from insurance to the final delivery of care. The length and complexity of the legislation, combined with a debate that often generated more heat than light, has led to massive confusion about the law’s likely impact. But it is now possible to analyze what is and is not in it, what it likely will and will not do, says Michael Tanner, a senior fellow with the Cato Institute.
In particular, we now know that:
While the new law will increase the number of Americans with insurance coverage, it falls significantly short of universal coverage — by 2019, roughly 21 million Americans will still be uninsured.
The legislation will cost far more than advertised — more than $2.7 trillion over 10 years of full implementation, and will add more than $823 billion to the national debt over the program’s first 10 years.
The new law will increase taxes by more than $569 billion between now and 2019, and the burdens it places on business will significantly reduce economic growth and employment.
While the law contains few direct provisions for rationing care, it nonetheless sets the stage for government rationing and interference with how doctors practice medicine.
Millions of Americans who are happy with their current health insurance will not be able to keep it.
In short, the more we have learned about what is in this new law, the more it looks like bad news for American taxpayers, businesses, health care providers and patients, says Tanner.
Source: Michael D. Tanner, “Bad Medicine: A Guide to the Real Costs and Consequences of the New Health Care Law,” Cato Institute, February 14, 2011.
For text:
http://www.cato.org/pub_display.php?pub_id=11961
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Tags: Economic, Economy, News, Small Business, Taxes
February 22, 2011
Date Funded: 2/17/11
Facility Amount: $1,500,000
The Company: This Texas based manufacturing company specializes in machine fabrication for the oil & gas industry, mining industry, and various heavy machinery industries.
The Issue: The company had a difficult year in 2010 due to the economy and decreasing orders, but has recently seen a major turnaround. Not only are their current customers starting to place orders again, but they are also receiving extra orders due to a new, state-of-the-art machine they purchased from overseas.
The Solution: When their accounts payable situation became stretched due to a sales decrease in 2010 along with their customers’ increased pay cycle, this former client came back to Allied for funding. These issues, along with the expected growth due to the new machine’s capabilities, encouraged the owner to return to Allied for factoring services.
The Win: Factoring with Allied will allow the company to satisfy many of their vendors, thereby improving their accounts payable status and cash flow.
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Tags: Client Satisfaction, Recent Fundings, Small Business, Success Story, Working Capital
February 18, 2011
Companies facing a cash-flow squeeze and slow-paying customers often sell their invoices or accounts receivable to specialized companies called factors. The factor advances most of the invoice amount — usually 70% to 90% — after checking out the credit-worthiness of the billed customer. When the bill is paid, the factor remits the balance, minus a transaction (or factoring) fee.Companies that use factoring like it because they get money quickly rather than waiting the usual 30 or 60 days for payment. After sending an invoice to a factoring firm, a business can have money in its hands within 24 to 48 hours.
Some businesses use factoring to get started. Whereas banks focus on a business’s creditworthiness in considering whether to make a loan, factors look at the financial soundness of a business’s customers. As a result, firms with scant credit history may be able to sell their invoices.
But the service can be costly — several percentage points more than a conventional lender. It was once a controversial source of financing because of its ties to financially fragile companies in the garment industry. A related commonly held impression is that a company uses a factor because it isn’t credit-worthy enough to deal with a bank.
Now billions of dollars in accounts receivable flow through factors each year, many of whom specialize in particular industries such as trucking, construction or health care. Some companies use it to meet cash-flow needs as a stop-gap measure. Others prefer factoring to banks, which often require more paperwork, or other outside investors, who may want a piece of the business.
Factoring isn’t likely to be economical for a firm that sends out thousands of small-denomination invoices, because of the service fees a factor may assess for reviewing each one for risk.
Since the factoring firm handles collections, the factor customer doesn’t have to worry about billing and credit checking and about staffing those functions. Another advantage: Companies wanting to expand overseas may find factors often already have extensive experience dealing with overseas suppliers or purchasers and so using factors can make international business efforts a lot easier.
Source: Wall Street Journal
Text: http://guides.wsj.com/small-business/funding/how-to-use-factoring-for-cash-flow/
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Tags: News, Small Business, Working Capital
February 17, 2011
We are pleased to announce the details of another “Funding By Allied” courtesy of Joel Flig, Managing Director, New Business, further strengthening Allied Affiliated Funding’s presence in the New York market and nationwide:
Date Funded: 2/11/11
Facility Amount: $1,500,000
The Company: This New York based company is a full-service marketing and communications company specializing in social media marketing, advertising, research and video production.
The Issue: Due to the company’s rapid growth and their account debtors paying in 60-75 days, there was an urgent need for working capital.
The Solution: This company was originally referred to Allied in late 2010 while the company was also trying to obtain a traditional bank facility. Their request for this bank line of credit was ultimately declined due to their limited financial history combined with the company’s need for a larger line of credit to finance new customer contracts. Therefore, the company decided to approach Allied again for immediate assistance with their working capital needs. Within less than one week, Allied was able to complete the due diligence process and closing documentation and provide the company the working capital they needed.
The Win: Not only was Allied able to provide a quick funding for this company and an ongoing cash flow solution, but Allied is also factoring a 100% concentration with their largest customer.
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Tags: Recent Fundings, Small Business, Success Story, Working Capital
February 3, 2011
Date Funded: 1/27/11
Facility Amount: $5,000,000
The Company: This Fort Worth based telecom company is a wholesale enhanced voice service provider serving most of North America.
The Issue: This company was funded by a bank and suffered losses in 2010 due to capital expenditure improvements that were necessary to take on additional business. Because of the losses, the company needed to find an alternative financing source.
The Solution: A business associate referred the company directly to Clay Tramel, CEO. Allied was quickly able to establish a $5,000,000 credit facility for this company which will now be factoring approximately 85% of their receivables. Allied was able to transition the company to a factoring facility until they can return to a more traditional bank facility.
The Win: Allied was able to assist by not only providing a timely funding for this company, but also by providing a $350,000 term loan that softened the company’s transition from the existing financing source to Allied.
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Tags: Recent Fundings, Small Business, Success Story, Working Capital
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