ss_blog_claim=bd50edc517cf0b7549fe6b5f63b6b5f8 The SLS Business Finance Blog: September 2007

Monday, September 24, 2007

5 Questions of a Business Broker, Sandra Dohn of Corporate Investment International

Sandra Dohn is a Business Broker with Corporate Investment International. She helps potential buyers and sellers of businesses. Sandra's firm, CII, works with no upfront costs and provides a complimentary business valuation to all potential sellers. That's just one of the great services Sandra provides. So let's see whats happening in the small business sale and acquisition market.

1) What is the # 1 issue facing sellers of businesses in the current marketplace today??

How do I sell my business for the best price while maintaining confidentiality?
The answer is to work with a Business Intermediary. When a client engages our firm, he can focus on running his business. Smooth operations and sound numbers count when you are selling. We screen and financially qualify buyer prospects.

2) What advantages do you have over other companies being under the CII umbrella??

Over 400 years of combined industry experience along with over 1 billion dollars closed transactions. Another benefit is our proprietary software valuation method which has been developed over the firms 20 year history. The #1 benefit for me is the working relationships-we truly partner to serve clients.

3) Why is valuing a business so difficult?? And why don't you charge for your great valuation service??

The valuation process is science and art. It involves combining several weighted methods using industry comps from actual completed transactions. We are a success fee company and do not charge a seller up front fees. We are compensated at closing.

4) What businesses do you specialize in and what types are selling well in the current environment??

Our sweet spot is businesses that sell for 500k to 3 million. We like manufacturing, service and distribution companies. Also, we have many qualified buyers looking for a business in a medical field because of a listing we are marketing in a niche medical area.

5) What are things that a seller can do now to prepare the business to sell before contacting you??

A dialog is the best way to get things started. I will be happy to discuss the business transfer process with any business owner. The earlier I can be involved in the process, the easier it is to position the business to sell for the best price and terms.

6) How can we contact you??

Sandra Dohn

Business Intermediary

Corporate Investment International of Greater Atlanta

1995 North Park Place, Suite 100

Atlanta, Georgia 30339

Phone: (770) 984-8989 Fax: (770) 984-8818


Tuesday, September 18, 2007

Federal Reserve Lowers Rates Today

The Federal Reserve sets fiscal and monetary policy for our government and our banking system. The Fed Funds rate was lowered by 50 basis points (0.50%) today to 4.75% from 5.25%. This rate is the rate banks lend money to other banks overnight within the Federal Reserve system. When this rate is changed, the Prime Lending rate changes as well.

Prime is the rate banks charge their very best commercial customers. Very best in this case means either Fortune 1000 type companies or companies with at least 5 years of solid profitability and an existing banking relationship with that bank that covers that same 5 year period. Prime dropped today from 8.25% to 7.75%.

Does this affect lease rates?? Yes and No

It seems like lease rates should be based on Prime but in fact they are not, they are based on 5 year Government Treasury Bill rates since most leases are around 5 years long. So can Prime (a commercial rate) drop while T(reasury) Bill rates dont?? Yes they can. However, usually when Prime drops, other bond rates drop and then Government T Bill and T Bonds react in kind and drop as well. So will lease rates decline?? Maybe, but they didn't drop today just because Prime dropped today.

Monday, September 10, 2007

5 Questions of a Banker: Courtney Barbito, Washington Mutual Bank

Washington Mutual Bank (known affectionately as WaMu) started as a west coast based mortgage company and community bank. They have expanded into a nationwide presence yet still keep the community bank feel when someone goes into the branch. Courtney Barbito is the Financial Center Manager (branch manager that means) of the Buckhead Atlanta, GA branch of WaMu.

1. What is the most common banking related issue facing small businesses today?

The most common banking issue is related to check clearing times. Small Business owners typically need checks deposited to be made available immediately, even if the bank does make the check available at the time of deposit there is still a chance the check could return causing a snowball effect of bank charges and returned checks. Banking technology is improving however we are not yet at the point where checks clear instantly. I suggest an electronic ACH service to ensure that funds are good when accepting checks for payment.

2.What does WaMu offer in terms of programs or other offerings that makes it unique and different in the banking environment?

The biggest difference that WaMu has is our branch design and customer service levels. WaMu tries to keep it simple! All of our branches have the exact same hours and the exact same lay out. We do not have a cut off time for transactions which means that small business customers can make deposits at any hour and the deposit will credit same day (pending any check holds). Our branch managers and business banking specialists have the ability to help customers without making 18 phone calls to other departments for approvals. Talk about saving time!!

3. Since every business owner knows they need a business checking/operating account, what is your most valuable service WaMu offers to a business that most businesses don't know about or think about right away?

Every business will have different needs but one piece of advice is to stick with what you do best. WaMu offers payroll services through PayChex and a variety of Treasury Management and Cash Management Services that match the needs of our business customers. We can even recommend a CPA in your area if you do not yet have that relationship. My advice is let the experts handle the parts of your business that you are not an expert at!

4. Which loan program is your most popular?

Our Business Line of Credit is a favorite among customers. It can be used to get you cash when you need it most. Loan amounts $100,000 or more can be linked to your checking for Overdraft Protection free of charge.

5. What does a business need to do to help improve their chances of being improved for a bank loan?

Contrary to popular belief, you do not necessarily have to have credit established in the business name. On the other hand, banks do require personal guarantees from the business owners. A business owner's personal credit and assets can be used to determine credit worthiness. The number one thing a bank looks at is if the business has enough income to repay the debt. Stating all of your income and revenues on your tax returns is essential. If the tax returns show the business took a loss then the bank will not give you a loan.

6. How can we contact you?
Courtney Barbito
Financial Center Manager
Buckhead Financial Center
3330 Piedmont Road
Atlanta, GA 30305
(404) 869-0199

You can find a location and business specialist near you at or (800)788-7000

Thanks for the great info Courtney. That point about the tax returns is especially helpful to our clients.