Bill McDermott | Norcross, GA
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Georgia Banking Association Update 2009
The Georgia Bankers Association recently put out it's Update for September 2009. Here are some excerpts from the 24 page report.
- Real estate marketplace: continued weakness in broad housing construction and purchase market
- regulatory interpretations of accounting guidelines pertaining to the fair value of real estate
- downward pressure on asset prices caused by market forces and unintended consequences of government stability programs
How to use Facebook for Business Networking
Most people use Facebook for staying in touch with friends or sharing pictures from vacations or other events. Rarely, do you ever talk about your professional life on Facebook. In the past, I have done most of my online professional networking on LinkedIn. However, I have recently launched a fan page for McDermott Financial Solutions on Facebook. Become a fan!
After all, LinkedIn has about 44 million users compared to 250 million on Facebook. Clearly, not all Facebook users are focused on business. But, business owners should not pass up the opportunity to use Facebook for networking. If you would like to use Facebook for business, start with your friend list. You may want to create a new friends list for professional friends in addition to your personal friends.
Once you’ve done that, you can go to the settings link in the upper right hand corner and restrict access to various parts of your profile. For example, you may want to share your pictures with your personal friends but not professional ones
You may want to expand your professional network by participating in Facebook Groups. Go to the search box, click on Groups and type in a key word. You can also search the Internet for popular Facebook Groups.
Once you’ve located a professional group, you may want to look for:
-recent news, member listings, discussion boards and wall postings
If you join a group, you may want to post an introduction and explain what you’re looking for, networking, employment etc. You may want to comment on discussion boards or make wall postings. You can also post a question for discussion also. Once you’ve mastered the basics, networking on Facebook will be similar to networking in real life.
While Facebook was originally created as a social network and operates as one for most people, there are some obvious applications for professional networking that are just too good to pass up.
I invite you to comment or share your insights at www.mcdfs.blogspot.com.
Managing by the Numbers
Financial management or managing by the numbers is simply taking the financial information you have and analyzing it to determine any strengths or weaknesses that exist in a company.
Most businesses produce regular financial statements and comply with recordkeeping requirements of their own or the bank they borrow money from. But, financial statement analysis is often overlooked or not performed on a systematic and timely basis to obtain insight into the financial performance of a company.
Believe it or not, a bank really does look at the financial statements provided to them and they do a comprehensive analysis of the balance sheet, income statement and cash flow while looking at some key financial ratios. They ask for three years worth of information to do trend anlysis on the statements also. The bank does it to protect the credit they extended to a company. Shouldn't you do it to protect the investment you made in your company too?
Financial ratios can measure different things in your business. In the following ratios / means "divided by"
Profitability Ratios measure gross profit and net profit margins, gross profit or net profit after tax/sales
Liquidity Ratios measure how much current assets a company has in excess of their current liabilities, current assets/current liabilities
Debt Ratios measure how leveraged a company is, total debt/total net worth
Activity Ratios measure how quickly a company is collecting receivables, turning inventory or paying payables, sales/accounts receivable, cost sales/inventory or accounts payable
Business owners can use ratio analysis to quickly spot problems. There are different ratios to measure different aspects of a business. Ratios reveal relationships that can help you evaluate the performance of a company.
Ratio analysis between key values can help you cope with the massive amount of numbers in company financial statements. If using these ratios will help a business owner spot problems quicker and enhance the long term success of a company, isn't that a good thing?
Capital Adequacy: What is it? Why should I care?
Remember: I'm a banker. Capital adequacy refers to whether the structure of the financing used by individual financial institutions is sufficient to preserve the safety and soundness of the financial system. Typically, banks are expected to maintain $1 of capital for every $8-$12 of assets.
The latest statistics from the Small Business Administration (SBA) show that "two thirds of new employer establishments survive at least two years, and 44 percent survive at least four years" This is a far cry from the previous long-held belief that 50 percent of businesses fail in the first year and 95 percent fail within five years.
A common fatal mistake for many failed businesses is having insufficient operating funds. Business owners underestimate how much money is needed and they are forced to close before they even have had a fair chance to succeed. They also may have unrealistic expectations of incoming revenues from sales.
It is imperative to ascertain how much money your business will require: not only the costs of starting, but the costs of staying in business. It is important to take into consideration that many businesses take a year or two to get going. This means you will need enough funds to cover all costs until sales can eventually pay for these costs.
Some of that money can be money that you borrow, but some should be money you invest in your business. Generally, to attract bank financing, the bank likes to see about $1 of capital for every $3-$5 in debt. Asset based lenders are comfortable with $1 of capital for every $5-$10 in debt because their loans are more based on the value of the accounts receivable. Beyond that, equity capital should be considered.
Take a lesson from the investment banking/banking industry: sometimes there is such a thing as too much leverage.
SBA Launches New 100% Guarantee Loan Program
SBA Launches New 100-Percent Guarantee ARC Loan Program
To Help Struggling Businesses
WASHINGTON – Small businesses suffering financial hardship as a result of the
slow economy may be eligible to receive temporary relief to keep their doors
open and get their cash flow back on track through to a new loan program
announced today by SBA Administrator Karen G. Mills.
Beginning on June 15, SBA will start guaranteeing America’s Recovery Capital
(ARC) loans. ARC loans are deferred-payment loans of up to $35,000 available
to established, viable, for-profit small businesses that need short-term help to
make their principal and interest payments on existing qualifying debt. ARC
loans are interest-free to the borrower, 100 percent guaranteed by the SBA,
and have no SBA fees associated with them.
“These ARC loans can provide the critical capital and support many small
businesses need to make it through these tough economic times,” said
Administrator Mills. “Together with other provisions of the Recovery Act, ARC
loans will free up capital and put more money in the hands of small business
owners when they need it the most. This will help viable small businesses
continue to grow and thrive and create new jobs in communities across the
country.”
As part of the Recovery Act, the ARC program was created as a no-interest,
deferred payment loan to help small businesses that have a history of good
performance, but as a result of the tough economy, are struggling to make
debt payments.
ARC loans will be disbursed within a period of up to six months and will provide
funds to be used for payments of principal and interest for existing, qualifying
small business debt including mortgages, term and revolving lines of credit,
capital leases, credit card obligations and notes payable to vendors, suppliers
and utilities. Repayment will not begin until 12 months after the final
disbursement. Borrowers don’t have to pay interest on ARC loans. After the
12-moth deferral period, borrowers will pay back the loan principal over a
period of five years.
ARC loans will be made by commercial lenders, not SBA directly. For more
information on ARC loans, visit www.sba.gov
You can receive all of the SBA’s News Releases via email. To subscribe, visit
http://web.sba.gov/list and select “Press Office.
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Evaluating Your Banking Relationship is Easier
For Immediate Release
Evaluating Your Banking Relationship is Easier than Ever
Atlanta, GA April 14, 2009- Business owners are struggling with all of the changes in the banking industry and recent turmoil in the economy. Should they stay with their current bank? Should they change? How do they find the financing they need to take their business to the next stage of growth? How do they restructure their debt given the changes in cash flow? After 30 years of experience in the banking industry, Bill McDermott’s desire to provide an independent view of the banking world and help business owners answer those questions led him to open McDermott Financial Solutions. (McDFS) McDermott Financial Solutions is a full service consulting firm that gives business owners the knowledge and experience of a banker who is independent of any banking organization to make them aware of their banking options.
The inspiration for McDFS came from several professionals in McDermott’s sphere of influence who are complaining about the challenging issues facing business owners today. Issues standing in the way of the next stage of growth or overwhelming debt obligations that are poorly structured because of cash flow changes are bombarding business owners. “The changes in the economy and banking industry have created a dramatic slow down and potential failure for many businesses” said Bill McDermott. “Traditional financing options and approaches are tightening up and may not deliver what is needed. Business owners need to know that they have options”
The idea that there could be a better way to help business owners solve banking problems caught McDermott’s attention. “I believe business owners are looking for an independent second opinion of their banking relationship from a banker with 30 years of experience in the industry. The ability to leverage banking contacts in the market that business owners don’t have is an added benefit. If a business owner has a problem, so do I” says McDermott.
Today, Bill McDermott will begin offering a free comprehensive banking review to businesses in metro Atlanta to include a review of financing, cash management, investments and electronic banking. Added McDermott “While most of my career I have worked with businesses in the $2-20 million revenue range, I can certainly work with companies that are either smaller or larger than this. Businesses are looking for the right strategy at the right time to insure their company’s success.”
For further information, contact
Bill McDermott
McDermott Financial Solutions
5208 Garnaby Lane
Norcross, GA 30092
770-597-3136
www.mcdfs.com
mcdfs.blogspot.com
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Bob Darden, CPA recommends Bill
"Bill listens to your plans and figures out a way to make them happen. I have known Bill for over 15 years and highly recommend him"
Robert W. Darden, CPA
Bill finds financing for new business venture
"I hired Bill to help finance a permanent loan on a new business venture. When others see obstacles Bill sees opportunity. His knowledge of the banking business and his long term relationships in the industry are extremely valuable to his clients." Tom Major, CEO, Major Concepts
Bill works with Ruth King, CEO, On the Ribbon
"I've enjoyed our relationship with Bill. It's not often you find someone who is knowledgeable about banking as well as small business. He responds to questions quickly. I would highly recommend Bill as person to handle your business banking needs." Ruth King, CEO, On the Ribbon
What CTR Partners says about Bill
"Having had numerous opportunities to work with Bill McDermott on a business level, I can personally attest to his professionalism, integrity, and superior knowledge of the lending profession. My company, CTR Partners, represents the interests of firms that are leasing or purchasing commercial real estate. We always enthusiastically recommend Bill to those firms who have a lending need, as we know he'll end up making us look good in the process!"
Kevin Murray, Managing Partner, CTR Partners
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