Leo Kanell

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  • Fundability

    Fundability

    Fund • a • bil • i • ty – [adj. Fuhnd-uh-bil-i-tee]
    You won’t find “Fundability” on Dictionary.com, so don’t bother looking. Fundability is a phrase we’ve coined to describe how a business measures up in relation to the entire business lending and investing community.

    If you want to have the business of your dreams then often you need quite a few things to make that happen such as:

    • Equipment
    • A Better location
    • hire more Sales people and employees
    • run massive marketing campaigns
    • buy inventory

    Just to name a few, the common denominator with each item necessary to build the business of your dreams is that they all take a lot of capital and so that is why it is so important to be fundable so your business can qualify for the money it needs to become the business that will make your family proud of you.

  • Building a Business Foundation

    Building a Business Foundation

    When it comes to Funding your business, you must first begin by building a business foundation.

    Your business foundation is when your business is in compliance with basic tenets that most businesses have such as:

    1. Incorporate your business with you secretary of State department in the state you choose.
    2. Get an EIN (Tax ID) so you are registered in the IRS system as a business and other databases.
    3. Set up a business bank account.
    4. List your business with business directories
    5. Set up profiles with the major business credit bureaus like D & B, Business Experian and Equifax Business.
    6. Set up a business website and email (hint don’t use a gmail email.)
    7. Make sure you use the same address, business name and email address for each listing on all business documents including the business bank account, the EIN, the Secretary of state and so forth.
    8. Get appropriate City or County business licenses.
    9. Set up Social media pages for your business at least with Facebook, Twitter and LinkedIn at the minimum.

    By doing these simple steps now your business has a chance to receive funding.

  • Startup Business Funding Trends 2016

    Startup Business Funding Trends 2016

    Leo Kanell discusses the best funding and financing options available for entrepreneurs in 2016. For more tips and info regarding funding for entrepreneurs go to www.leokanell.com.

    For the majority of business startups bootstrapping is most often the path taken to launch your new business. For most they are under capitalized which puts them in a tremendously vulnerable position. In this video Leo Kanell explains the top 3 trending options for startup businesses to secure funding. These are options that can be available to any entrepreneur.
    #leokanell
    That said, some of these startup funding options are easier than others. So by following the newest movements with lenders you will increase your odds for successfully securing capital significantly. Leo Kanell teaches entrepreneurs how to creatively secure affordable financing to fuel the growth of their new or existing business. Nothing puts a smile on his face like knowing that the latest entrepreneur was able to secure funding and launch their business thanks to his expert guidance on the subject of startup business funding.

     

  • Startup Funding Options

    For most new startup businesses the task of securing some startup funding capital can be extremely daunting and in reality where to start is the most difficult thing to know.  Most new entrepreneurs immediately think of going to their local bank and seeing if they will qualify for some money, let’s begin by looking at that experience and then other options after that.

    When you go and see your bank it’s important to understand that most banks do not lend to brand new businesses since they are unproven and a high risk.  That means the only option you will find at a bank will be the infamous SBA option.  SBA has 3 loan types, the 7(a), 504 and the express.  The 504 and express almost always are exclusively for established businesses with 2 to 3 years of profitable business tax returns.  The 7(a) is the only option that can realistically be used for startup businesses.

    Qualifying for a 7(a) loan can be a difficult task, in reality it comes down to a lot of things like your business plan, industry type, your personal credit, but indeed the most important factor will definitely be whether you have any assets or collateral.  Acceptable collateral types will generally be significant equity in your home or other real estate properties, newer equipment with a strong value and generally a 401k or IRA.  So if you have those types of collateral then you stand a good chance at securing a startup SBA 7(a) loan.

    You will also need some type of down payment usually 10 to 25% is what most lenders want, for new businesses the percentage is usually much closer to 25%.  So you have to ask yourself what percentage of new startups actually have that type of collateral and down payment available for their business to secure startup funding?  Since I have personally spoken with thousands of new business owners in my experience it would seem that less than 5% of new entrepreneurs have those kinds of qualifications, assets and collateral.  So if you don’t possess those items then what other options are there?

    In reality the best option will be a mixture of unsecured credit lines.  These credit lines do not require extensive income documentation or collateral, in most cases you just need a 680 credit score to qualify for them.  The monthly payments are low and affordable and they are flexible tools.  Even if you are successful at securing an SBA loan, an SBA loan will often not be able to go towards working capital, so in reality you will still need additional funds for working capital like paying payroll, marketing and other costs.  For most startups unsecured credit lines are your best bet.

    ABOUT THE AUTHOR:

    Leo Kanell teaches entrepreneurs how to secure affordable capital for their new or existing businesses.  For more info go to http://www.leokanell.com

  • Credit Inquiries Further Clarified

  • Credit Inquiries Have Ruined My LIfe

    Over the years I have helped my clients secure over $120 Million dollars in funding and I’ve learned a few important items that lead to success when securing funding for a business.  One of the most misunderstood concepts that is constantly be spread across the country is the idea that a few credit inquiries aka “hard credit pulls” are going to drop my credit score 100 points and ruin my life.  Today I’m going to tackle this common misconception with the facts of when credit inquiries do negatively impact you and when they are irrelevant to your funding options.

    HOW INQUIRIES AFFECT YOUR CREDIT SCORE

    So let’s look first at how credit inquiries can affect your credit score, first of all credit inquiries make up about 5 to 10% of your credit score, in most cases the percentage is closer to 5% so will 6 to 8 inquiries drop your credit score 100 points, the answer is definitely no, it might lower the score by 15 to 20 points and that is about the biggest impact.  Of course if you go hog wild and have your credit pulled 25 to 30 times in a 30 day period then that could lower your score a lot more, in reality though most people have 2 to 4 credit pulls every 2 months and that is not going to make a big impact on your credit score.

    SECURED LOANS

    Let’s say that you are looking for a mortgage or an auto loan and you go to a few different mortgage and auto lenders to look for financing.  The good news is that the three major credit bureaus will actually count most inquiries that are mortgage or auto loan related as one inquiry when they are pulled within a 2 week window.  The credit bureaus understand that you are looking for the best deal and as such they don’t punish you.  Now regarding the effect inquiries will have on actually securing the mortgage or auto loan, well the answer is there is really no impact, secured lenders like mortgage lenders and auto lenders know that they have collateral and so in case of a client not making their payment and defaulting on a mortgage or auto loan they can take back the collateral, so what that means is they don’t generally take credit inquiries as an important factor in underwriting your loan.  At most a mortgage lender will require a letter of explanation for what the inquiries are.  In reality credit inquiries rarely have much of an impact on your ability to qualify for a mortgage or auto loan.

    UNSECURED LOANS

    Unsecured credit lines, loans and credit cards are affected much more with inquiries.  Unsecured lenders take on more risk than secured lenders so if you try to get a credit card or two and already have several other inquiries on your credit report in the weeks prior to applying for a new credit card then the credit card lender will assume you already secured financing elsewhere and in many cases they will automatically decline your request for a new credit card or credit line.  Thus in all of lending the biggest impact that credit inquiries can have on you as a borrower is when you apply for any type of unsecured credit lines or loans.  Some lenders nowadays will actually do a soft pull on your credit report which will have no impact, but most lenders will do a hard pull.  Either way you will want to pay special attention to hard credit pulls.

  • Why Mark Cuban is Wrong about Starting a Business on a Business Loan

    Shark Tank has become one of the most fascinating shows on tv regarding entrepreneurship and capitalism.  One of its current “Sharks” is Mark Cuban, he is a man I respect immensely in terms of business development, entrepreneurship and creating wealth.  He has also been quoted as saying that he would never start a business on a loan.  Why would he say that?  There is the fact that it is more profitable for himself and his show to give capital to entrepreneurs for ownership and equity in these new businesses, if the entrepreneur figured out how to secure financing then clearly that would not benefit the premise of the show.  That said, he may really believe that is an important aspect of starting a business.  I think he is completely wrong and I’m going to prove it with some concrete examples.

    I have started multiple multi-million dollar businesses and each of them was started with some sort of loan or funding that I had to creatively secure in order to get these businesses off of the ground.  So from my own first hand experiences I can tell you that in order to begin and at several turning points in my businesses the ability to secure capital for them has been a tremendous key.  So that said, allow me to share a much better example of businesses succeeding due to a business loan or some sort.  

    Allow me to present Walmart.  We all have been to Walmart and have witnessed its growth first hand.  Decades earlier it was begun with one store by a great man named Sam Walton.  Sam started his first store with a loan of $20,000 and $5,000 he had saved up.  He continuously tinkered with the discounting methodologies that he would develop over the years to create the biggest global retailer in the world and he would never have succeeded at growing it the way he did without constant financing.

    At one of his first stores he secured a loan for $1,800 to finance an ice cream machine that he used to sell ice cream outside his store and attract new customers.  He was nervous about the loan, but it ended up increasing his sales significantly.  As he began to grow from his first variety stores to his first full fledged actual big box store Walmart he went around looking for capital from investors.  Each investor passed on his business model believing it would not succeed long term.  So Sam “borrowed to the hilt” and risked all of his personal assets in order to build Walmart and grow it exponentially.  Walmart now has thousands of locations worldwide and had annual sales recently of nearly $500 Billion Dollars.  It all started with a loan and was grown with significant funding.  Additionally if Sam were still alive today he would be the world’s richest man and be valued at 160 Billion nearly double what the current richest man Bill Gates is worth (about $80 Billion) so suffice it to say understanding how to start a business with a loan can be one of the best decisions that a business owner ever makes.  Comprehending the best methods to secure growth capital as your business expands can be vital to long term growth and success.

  • Social Media and How It Can Be Hacked By Your Daughter

    Putting together a top notch business in today’s world comes with certain checklists that you must cross off if you want to successful.  You need a solid website, a blog, lots of social media pages that attract followers and to be truly effective it certainly is a good idea to do some press releases and spend some money on them.

    So the last several weeks I have been working on doing just that, getting everything just right.  I put together a solid video to inspire my clients interested in starting a business, I built a website, and of course set up decent social media accounts.  With all of those items taken care of I next proceeded to write an article for a massive press release.  The article came together well and was accepted to be released.  The day after it was released I was pleased to see that various news organizations including tv and news organizations like the Boston Globe and Miami Herald had all picked it up.  I started clicking through some of the press releases of my article and noted some odd pictures of my twitter page with a profile picture not of myself, but of my daughter.  Next I saw that my youtube channel had several odd likes and comments about “mako mermaids.”  At that moment it became clear that my 10 year old daughter had hacked my social media accounts and posted what she liked on them including replacing my picture with a much better one of herself.  Hilarious indeed, but somewhat unfortunate given the investment in the press release.

    The moral to this story is to make sure that you communicate with all of your kids about the power of social media and how it should be used effectively especially as they grow up.  Social media can have powerful positive and negative effects for us all.  So this little blog will be posted on each of my social media sites and may it serve as a lesson for us all to be more aware of our need to talk with our kids about social media.

  • The Quest for Excellent Health

    So when it comes to your health there are not many priorities that rank higher.  You can have all of the power and money in the world and it will all mean absolutely nothing if you do not have good health to enjoy it.  Indeed no matter what is most important to you whether that is family, recreation or good ol-fashioned hard work to have good health is to be able to enjoy what you love.  So that said let’s take a look at some of the keys to good health today including diet, exercise and planning and focus.

    DIET

    Ok so we have all at various times experimented with a multitude of diets, so what is really effective?  The truth is that it completely depends on what your goals and focus are.  For example if you are looking to lose weight and fat and become more lean which the majority of the population is trying to do then a more refined diet is needed.  However, if you are looking to increase muscle mass and grow muscle size then your diet will differentiate substantially from that of someone looking to lose weight.  Let’s focus on what most people are looking to accomplish which is to lose fat, excess weight and increase energy.  I have spent countless hours researching this and when I was overweight and out of shape I found the following formula to be absolutely effective at cutting that nasty gunk and grime we call fat cells.  There are essentially 2 items in the foods we eat that absolutely lead to that frustrating spare tire, they are starches and sugars.  Starches refer to those tasty breads, pastas, cereals, french fries and most italian foods that provide energy but very few health benefits.  These foods are more difficult to digest, they slow down our metabolism and frankly put us to sleep.  Have you ever gone out to lunch at that great Italian place and then afterwards wanted nothing more than to take a long nap?  The reason is that starches simply slow us down from a physical standpoint.  Sugars while not having the negative slow down effect that their sisters carbs have have a similar impact on the fat cells we take on.  Sauces, sweets, candies, cakes, ice cream and any food with corn syrup and fructose are all foods that are going to often lead to unwanted fat gain.  So at this point you’re saying wow, this really sucks a lot of my favorite foods lead to straight up fat gain, yes this is sadly true, there are now more than ever tasty alternatives that I will share with you in future posts.  Bottom line you must focus on consuming lots of veggies, most fruits and lean meats, I love what one fitness coach said, “if man makes it don’t eat it, if nature makes it, eat it up!”  Suffice it to say you’re going to need to dig deeper and focus on avoiding starches and sugars if you want to kill the spare tire around your waist.

    EXERCISE

    There are a plethora and I do mean plethora of workout options in existence today and each of them is going to be better than sitting you butt on your couch and doing nothing day after day, but to get the best results there are some things to keep in mind.  Many workouts are either focused on cardio vascular (cardio) activity that gets you moving and your heart pumping or they are all about strength training.  What I have found to be most effective is a combination of both.  So 2-3 times a week I will do cardio and 2-3 times a week I will do strength training.  I typically rotate each day, so on Monday I may do cardio for 30 minutes and then, the next day on Tuesday I will do strength training.  Adding a little yoga, martial arts and pilates once a week can be extremely beneficial and lead to stronger joints and tendons.

    SCHEDULE IT OR FAIL

    The number one reason that the majority of Americans and good people around the world are overweight and obese is not because they are lazy, but because they simply do not schedule their diet and exercise plan.  The key to success with anything is to have a concise time when you make your game plan, the New England Patriots and their outstanding coaching staff have every minute of their practice and game film study planned to the t, there is no wasted time or movement everything is done with purpose, if you want to be physically fit then you need goals and schedules, if you know you work from 9 to 5 Monday thru Friday and that you must leave your house by 8:30 am to get to work on time, then you either need to schedule your workout at 6:30 or 7:00 am or 6;30 or 7:00 pm at night.  For most people there isn’t a snow ball’s chance in hell that they will work out after a grueling day at the office so working out first thing in the morning is the best time, if you schedule it then the fitness will come.  Additionally with your diet if you don’t plan out your means and what you will buy at the grocery store then plan on failing at your fitness.  You should plan out your meals and groceries at least once a week to stay on target.

     

    Well that is a solid generic game plan that will lead to being healthy, hot and fit!

    For more tips at health transformation just check in to our blog.

  • 3 Keys to Double Your Business

    Whether you have recently started a business or have been successfully running your business for several years there are 3 key elements to focus on when it comes to growing your business.

    1.  Increase Sales Through Distribution Channels

    If your business is a Starbucks location, then to double business you need to set up another location to double sales, if your business is a monthly subscription service then you need double the amount of subscriptions you have, at the end of the day business is not rocket science, but one of the most important factors for doubling your business is to increase distribution channels, if you aren’t sure what distribution channels are then you need to figure that out quickly.  We recently helped a client in Silicon Valley secure money who literally doubled his business from 2012 to 2013, for his business to double he simply needed larger clients who paid more.  His business provides cloud and database services for medium size and large companies.  They recently landed a big client, maybe you’ve heard of them, Facebook.  In order to double their annual sales he focused on working in networks with larger companies and therefore larger needs, the end result was he doubled his annual sales, profits and overall business.

    1.  Increase your Sales force

    Whether you sell insurance or technology service or tires, at the end of the day people and human capital are often your most valuable resource, in order to grow and double your business, you must increase your sales force.  Recruiting and properly training your Sales Force is a definite key when it comes to doubling your business.  When thinking about how best to strategically grow your sales force, each business and owner are different, some owners will say be very selective about hiring the right sales person and still others will say take quantity over quality and hire as many as possible and fill the market with your sales reps.  Typically I would take the position of neither extreme, you want to hire quality Sales Reps, but if you try to attract only the best and brightest you will surely miss out on other sales people that would have done well and helped to boost your company’s bottom line, at the same time there must be some qualifying formula that you follow when bringing in sales people based on the criteria that you use to hire sales reps.  Focusing on a down the middle approach to bring in qualified, but also an adequate number of representatives to build more brand awareness and reach for your business is paramount to doubling and growing your business in a short time.

    1.  Make Sure you Are Well Capitalized

    In order to grow and double your business you must have adequate growth capital and cash on hand to finance it, whether that means securing a better location, purchasing more inventory, increasing advertising investment or dramatically increasing your sales force, each of those actions will require significant capital needed to grow your business.  We are all aware that most businesses fail due to running out of money and capital so securing lines of credit, working capital loans and financing for a new location or much needed equipment is essential for a company to double their sales/revenues.

    When you increase your distribution channels, increase your sales force and secure growth capital you are well on your way to growing and even doubling your business!