June 05, 2012 --
Santa Ana, CA (PRWEB) June 05, 2012
Bank of America recently announced in a press release that it hired more than 70 new business bankers throughout Northern California to assist small businesses. These new hires are part of the companys efforts to fulfill its promise of 1,000 small business bankers nationwide. Bank of America is seemingly attempting to court small businesses to bank with them. For a small business owner, this commitment to small business might seem attractive. However, there are many things to consider when choosing a bank to hold funds for a small business. In the recent blog post Shopping Around for a Bank: What Youll Need From Your Small Business Account, The Business Finance Store discusses things small businesses should consider when choosing an institution to do their small business banking.
Whether starting up a new business, moving to a new state or pursuing other changes, many small business owners find themselves in the position of looking for a new place to keep the funds that keep a small business running. In many cases, choosing the best local bank is as important for small business depositors as it is for individual consumers and families. Choosing the right bank can help make running a business significantly easier in the long run. Read more about how to choose a bank for small business banking at The Business Finance Store Blog.
The Business Finance Store is a business financing and consulting firm that offers customized Business Financial Solutions. Seasoned professionals offer assistance in a variety of financial solutions to help small businesses succeed such as: Business Financial Solutions, Legal Solutions, and Accounting Solutions.
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The staff at The Business Finance Store understands that starting and growing a business is an exciting time. They keep it exciting by taking care of some of the most difficult aspects, by providing legal advice, helping with vital responsibilities like accounting & bookkeeping, and by obtaining business finance. They can quickly and easily guide entrepreneurs through many different complicated processes and put them on the path to success.
For 10 years The Business Finance Store has been helping startups and other small businesses legally structure their companies, find the right franchises, get the funding they need, and achieve the American Dream of owning their own successful business. Since expanding nationwide in 2007, they have helped thousands of companies and have funded over $60 Million in business credit lines, not including SBA loans. The Business Finance Store sees limitless potential in the current climate, and looks forward to many strong years of growth to come. Take some time to review their services, and give them a call.
For more information, or a free, no-obligation analysis of your business needs, visit The Business Finance Store website: http://www.businessfinancestore.com. A member of their professional staff will contact you to discuss your business' short and long-term goals. Whatever you need, The Business Finance Store is there.
Read the full story at http://www.prweb.com/releases/2012/6/prweb9574492.htm.
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G7 finance ministers vow European action as Spain fears mount - Globe and Mail
A conference call of G7 finance ministers concluded with promises of further European action over the coming weeks to calm markets as concern now focuses on the Spanish economy and its fragile banking sector.
The discussion among finance ministers and central bank governors focused on potential policy responses, “including the progress towards financial and fiscal union in Europe,” according to a brief statement released by Finance Minister Jim Flaherty’s spokesperson. The statement was virtually identical to one issued earlier Tuesday by the U.S. Treasury.
Both Mr. Flaherty and Bank of Canada Governor Mark Carney took part in the conference call.
Japanese finance minister Jun Azumi said the ministers discussed the situation in Europe.
“The European side stated that they will respond to it speedily,” he said, according to reports.
The private call was never officially announced, but Mr. Flaherty disclosed it would take place while speaking with reporters on Monday.
The next summit of G20 leaders – to take place later this month in Los Cabos Mexico – is once again shaping up as a deadline of sorts for European leaders. The planned agenda of last year’s G20 summit in Paris was largely derailed by Euro zone politics as European leaders grappled with Greece’s plan – later retracted – to hold a referendum on Europe’s bailout conditions.
The G20 summit will take place just days after the June 17 Greek election, in which voter decisions between pro and anti-bailout parties could hasten that country’s exit from the euro zone.
Spain is now the most pressing concern, as the region’s fourth-largest economy admitted for the first time Tuesday that it will need European help to shore up its banking sector.
Prime Minister Stephen Harper, who is in London for the Queen’s diamond jubilee celebrations, will be in Paris Wednesday to meet with French President François Hollande.
With a report from Jeremy Torobin
G7 finance chiefs gather round Spain’s sick bed - EurActiv.com
With Greece, Ireland and Portugal all under international bailout programs, financial markets are anxious about the risks from a seething Spanish banking crisis and a 17 June Greek election that may lead to Athens leaving the euro zone.
"Markets remain skeptical that the measures taken thus far are sufficient to secure the recovery in Europe and remove the risk that the crisis will deepen. So we obviously believe that more steps need to be taken," White House press secretary Jay Carney told reporters.
Canadian Finance Minister Jim Flaherty said ministers and central bankers of the United States, Canada, Japan, Britain, Germany, France and Italy would hold a special conference call, raising pressure on the Europeans to act.
"The real concern right now is Europe of course - the weakness in some of the banks in Europe, the fact they're undercapitalized, the fact the other European countries in the euro zone have not taken sufficient action yet to address those issues of undercapitalization of banks and building an adequate firewall," Flaherty told reporters.
The disclosure of the normally confidential teleconference came as European Union paymaster Germany said it was up to Spain, the latest euro zone country in the markets' firing line, to decide if it needed financial assistance, after media reports that Berlin was pressing Madrid to request aid.
A G7 source, speaking on condition of anonymity because of the sensitivity of the issue, said there were concerns about the risk of a bank run in Spain, which is struggling to recapitalize nationalized lender Bankia and smaller banks stricken by the collapse of a property bubble.
"There is concern on whether there will be a bank run in Spain that could have repercussions beyond the euro zone," the source told Reuters.
Spanish Prime Minister Mariano Rajoy is pressing for a direct European rescue for his country’s banks with moral support from the European Commission, but Germany appeared to rule out such a "bailout lite" for the euro zone's fourth biggest member.
A source with knowledge of the matter said Madrid is working along with European institutions to find a way to directly refinance banks using rescue funds without the government having to come under a full EU/IMF bailout programme.
"Right now the most urgent issue is the banks, and there are negotiations to refinance the banks directly without it being an intervention. It's a mechanism for all [European] banks, not just for Spanish banks," the source said.
Under current rules Spain can get a loan from the European rescue fund, or EFSF, but it would come with tough conditions and intrusive supervision, with a high political cost for Rajoy. The new permanent European rescue fund, the European Stability Mechanism (ESM), due to enter into force in July, can lend to banks but the request still has to be made by the state.
The source with knowledge of the matter said Spain believed the European Union's executive could take a plan for bank aid to a summit of the bloc's leaders on 28-29 June.
EU Economic and Monetary Affairs Commissioner Olli Rehn said Brussels was considering direct bank recapitalisation by the ESM to break the link between weak sovereigns and ailing banks, but it was not possible under the treaty currently being ratified by member states.
"This is not part of the ESM treaty for the moment, in its present form, but we see that it is important to consider this alternative of direct bank recapitalisation as we are now moving on in the discussion on the possible ways and means to create a banking union," Rehn said.
Germany, the main contributor to the bailout fund, opposes changing the ESM treaty to allow direct bank recapitalisation and has veto power. Berlin contends that only a formal programme approved by national parliaments permits proper international supervision of how aid funds are spent.
Mubarak’s acquittal of corruption to hinder retrieval of smuggled money: experts - english.alarabiya.net
Mubarak’s acquittal of corruption charges is bound to have a negative impact on the Egyptian economy in general and will hinder the retrieval of money smuggled abroad in particular, financial experts have argued.
The fact that neither Mubarak nor his sons were found guilty of corruption gives an impression that Egypt’s anti-corruption laws are not deterrent enough, said economist Ahmed Salim told the London-based newspaper Asharq al-Awsat.
“This is expected to makes investors apprehensive of starting any business in Egypt in the future,” he said.
The acquittal, Salim added, means that all the money Mubarak and his sons smuggled abroad is now their own and the Egyptian government will not have the right to retrieve them.
“In addition, the countries in whose banks the money is deposited can file money laundering charges against the Mubarak family and will then confiscate the money.”
Hossam Eissa, professor of international law and member of the Legal Committee for the Retrieval of Egyptian Money Abroad, said Mubarak’s lawyers will use the verdict to lift the block some countries imposed on the former president’s accounts.
“Keeping the blockade and getting the money were contingent upon a verdict that finds Mubarak guilty of financial corruption,” he said.
Eissa held the Egyptian authorities accountable for not taking serious steps towards retrieving the money.
“There was no real political will to get the money back and the freezing of some accounts was the result of pressure put on foreign governments by Egyptian communities and non-governmental organizations.”
According to a prominent banking expert, who spoke on condition of anonymity, the verdict that came in favor of Mubarak is an implicit permission for foreign governments to unfreeze the accounts and return the money to its owners.
“It is also expected that the prosecutor general will unfreeze Mubarak’s accounts inside Egypt since he was not found guilty of corruption,” he said. “The same will apply to all members of the former regime who are acquitted of the same charges.”
For banking expert Ahmed Adam, a change in the verdict is the only way the money can be returned.
“If after the verdict is appealed, Mubarak is found guilty then there is hope,” he said.
It is also important, he added, to put pressure on the various channels through which this money was taken outside the country.
“Some amounts were transferred through banks and others through business deals with a number of investors and businessmen. Tracking those down will make it easier.”
Assem al-Gohary, head of Egypt’s Illicit Gains Authority who also heads a judicial committee tasked with the retrieval of smuggled money, said in mid-April that Egypt had filed a lawsuit against the British treasury to obligate it to cooperate with Cairo in recovery of frozen assets in England.
In May, a Swiss court issued an un-appealable verdict to include Egypt as one of the plaintiffs in a case a Swiss criminal court is pursuing over Mubarak and nine of his aids smuggling money illegally.
One third of the $1.5 trillion of assets held offshore by Middle Eastern and African elites is in Switzerland, according to research firm MyPrivateBanking in Kreuzlingen, Switzerland
(Translated from Arabic by Sonia Farid)
Money ‘may influence’ Wisconsin recall election - Presstv
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John Grant, Vietnam War veteran and journalist from Thiscantbehappening.net, says concerns in Wisconsin are growing about massive amount of money being pumped into the state’s recall election by the Republican wing that “may influence a lot of people ...Smart money to follow Smartpay's leader? - Stuff
OPINION: From time to time you hear of companies complaining they cannot raise capital in New Zealand.
Kiwi investors are too conservative, too dim, too poor, too insular, too blinkered, too demanding, too risk averse and too blind to opportunity, they say, before flouncing across the Ditch to try their luck in Australia.
They may be right. On the other hand, they may just need to look in the mirror to find the cause of their troubles.
To date, Chalkie has placed Smartpay in the latter category. The eftpos systems company is involved in some clever technology most of us use every day, but since arriving on the NZX through the back door in May 2006 its performance has been, to put it politely, mercurial.
Indeed, in the last couple of years it has been more quicksand than quicksilver as the business thrashed itself ever more deeply into a quagmire of debt.
This time last year managing director Ian Bailey was trumpeting a "remarkable turnaround" as earnings before interest, tax, depreciation and amortisation hit a record $7.2 million, a 252 per cent improvement on the previous year.
Revenue, meanwhile, was apparently a respectable $47m.
The shares, then trading at about 21c, steadied briefly before resuming their downward slide the following month. Already a minnow, Smartpay was turning into a penny dreadful.
A big part of the problem involved its business model. Smartpay provides eftpos payments systems – the hardware, the software, the connection and ongoing service – for retailers who pay fees over the term of a contract of, say, three years.
But instead of doing the deal and waiting for the cash to come in, Smartpay typically sold 80 per cent of the future cashflows to third-party financiers. This allowed it to book most of the contract value as immediate revenue.
Except it was not really revenue, it was debt – and costly debt at that.
Adding to the burden was its $6m acquisition in 2009 of the payments unit of ProvencoCadmus, a business well-known to Bailey who had co-founded the Cadmus part in the 1990s.
But back to the debt.
In the year to March 2011, when revenue was $47m, the cash-flow statement said actual receipts from customers were $33.6m.
Payments to suppliers and employees, meanwhile, were $42m, and operating cash was negative $11.8m.
The gap was bridged with borrowing of $13m.
Same thing happened the previous year.
To be fair, there was logic behind the idea, which was to ensure growth was not limited by cashflow. Signing up customers entailed up-front costs, such as buying the eftpos swipecard hardware from a contract manufacturer in China, and those costs had to be financed somehow.
Unfortunately, Smartpay's solution was to borrow from a range of second-tier lenders such as FE Securities at rates as high as 18 per cent, which did not do much good for its profitability.
It also meant if the rate of signing new sales contracts slowed down, revenue would fall off a cliff.
This is exactly what happened.
Smartpay had been benefiting from rules obliging New Zealand retailers to upgrade their terminals, but by June last year the job was done and sign-ups plummeted.
Hence, the latest full year result reported last week revealed revenue down from $47m to $29m.
Indeed the result was chocker with ugly numbers.
The bottom line was a $12.7m loss and liquidity was critically low – those borrowings had driven current liabilities to $26m, well in excess of current assets of $17.6m.
Normally, we might associate these figures with the beginnings of a death spiral, but Chalkie has been intrigued to see a very different scenario emerging under the leadership of Bradley Gerdis, Smartpay CEO since December.
South African-born Gerdis, based in Sydney, has a useful track record for the job, having been a founding executive in 2004 with ASX-listed Customers Ltd, which built a network of independent cash machines in Australia.
Since leaving Customers in 2008 he has been busying himself with a few jobs at his own firm Active Capital Partners, but obviously saw an opportunity to make a difference at Smartpay.
We got a picture of the difference last week when Smartpay announced a major restructuring along with its dreadful result.
The main change involved a $13m influx of equity capital and a new $25m bank debt facility with ASB – $20m of it to revamp the balance sheet, and $5m headroom for capital expenditure.
The money allows Smartpay to buy back its contract cashflows from the second-tier financiers at a much cheaper rate, thus ensuring revenue stability in years ahead.
Gerdis describes it as "the flicking of a switch".
At balance date Smartpay had borrowings of $29.4m, most of it high cost and two-thirds of it due within a year.
The refinancing deals with that immediately and sets up the business to get $17.5m of recurring revenue a year from now on, producing earnings before interest, tax, depreciation and amortisation of about $7.5m.
At that level profitability looks within reach as interest costs on $20m will likely be below $1.5m.
"Because the previous management never really had access to the right type of capital, both debt and equity, it's been funded by very high-cost mezzanine debt and it's bled the business of the cashflow that should rightly have belonged to shareholders," Gerdis told Chalkie.
"The immediate release of equity value by making this thing cash-flow positive and self-sustaining is just tremendous. That's why we were able to raise the money at a significant premium to the market because investors understood that."
It is a fair comment. The new equity was raised at 11.5c a share. Before the announcement the shares were trading at 8-9c.
So why was Smartpay able to raise a decent chunk of money at a premium now, when it struggled to do so before?
Chalkie recalls considerable bleating from Smartpay about lack of interest from Kiwi investors and its desire to shift to Australia.
The main reason, Chalkie suspects, is that investors were not comfortable with the previous plan or the previous leadership.
For example, in 2011, the year Bailey described Smartpay as a "changed company", it still appeared to be persisting with the debt-funded model.
The annual report said: "Providing we continue to to expand the rental base, and ensure funding is in place to support the growth of the rental book, then the company will rapidly reach the point whereby the ongoing monthly cashflows will exceed all costs and overheads, leaving a residual cash component available to repay corporate debt."
This sounds like more of the same, and although there was acknowledgement of high-interest costs as the company expected to "work directly with banks as opposed to mezzanine funders as we have now", Chalkie reckons it was about as encouraging to investors as a half-time team-talk from Eeyore.
The idea now is to pick up business in Australia, where the eftpos trade has hitherto been dominated by the big banks.
Smartpay's announcement in February of a deal to provide 4000 terminals to customers of Bendigo & Adelaide Bank indicated the way forward.
Gerdis, gung ho, describes the Australian business opportunity as "real, sizeable and immediate".
"This is expected to include strong organic growth which will in all likelihood be accelerated through strategic acquisitions," he says.
He's talking a good game, clearly, but Gerdis has his money where his mouth is, having invested $1m at 10c a share in December. He also has some hefty options to subscribe for shares in future at prices starting at 15c.
Adding to the picture of a company on the move is the awarding of options on similar terms to new Australian chairman Ivan Hammerschlag, executive chairman of Athlete's Foot owner RCG.
It will be interesting to see whether the incentives produce a higher share price for investors. If it does – and after previous underperformance, let us hope so – it will be quite a turnaround story, although not a particularly New Zealand one.
- Chalkie is written by Fairfax Business Bureau deputy editor Tim Hunter.
- © Fairfax NZ News
G7 finance ministers confer on Europe's debt crisis - CBC
The euro traded lower Tuesday as traders reacted to a communique after a conference call among finance ministers of the world's seven wealthiest economies focused on trying to find a way out of Europe's debt crisis.
The common currency was down 0.35 per cent at $1.24 US late in the morning.
The U.S. Treasury Department said the conference among the finance ministers and central bank presidents ended with agreement to keep monitoring developments closely in the runup to a leaders' summit of the Group of 20 major economies on June 18-19 in Los Gatos, Mexico.
The statement said the talks considered how to forge a stronger financial and fiscal union in Europe.
Canada's finance minister, Jim Flaherty, disclosed Monday that the call, usually confidential, would be held today.
Taking central focus was Spain, whose own finance minister appealed Tuesday for European leaders to set up a method for its troubled banks to get direct financial help.
Cristobal Montoro warned that the country's high borrowing costs mean that it faces increasing trouble accessing credit markets.
"The door to markets is not open for Spain," Montoro said.
Data suggests slump ongoing
Lenders want to know whether that will prevent Spain from bailing out its troubled banking sector, which is weighed down by bad real estate loans.
Adding to the crisis was the uncertainty of how Greeks would vote in an election on June 17 that is widely seen as a referendum on whether the country will continue with the austerity measures that are a condition of continued international bailouts required to keep it part of the currency zone.
The urgency of finding a response to the crisis was underscored by data that suggested that services and manufacturing output in the eurozone slumped at the sharpest rate in almost three years last month.
London-based Markit Economics said its composite index of purchasing managers in both industries fell to 46 from 46.7 in April. A reading below 50 indicates an economy in contraction.
The G7 call came ahead of a summit of European leaders on June 28.
It’s expected the European Commission and the European Central Bank will propose a "banking union," which would oversee banks and perhaps even be granted the authority to bail out financial institutions directly. Now, they can only rescue national governments.
“There’s no divergence in views when it comes to how to tackle this crisis overall,” a spokesman for EU Commissioner Olli Rehn said in Brussels.
With files from The Associated PressGerman finance minister Wolfgang Schaeuble firm on eurozone measures - Economic Times
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